24 October, 2020

Oil That Never Caught Fire

A scheme to credit kerosene subsidies to beneficiaries’ accounts flopped real big in Rajasthan

Jitender Gupta
Oil That Never Caught Fire

Dharamvir Chaudhary’s fair price shop in Kot Kasim, Rajasthan, is deserted. A year ago the tehsil played host to an experiment by the government: residents were asked to buy kerosene—a fuel most of India’s poor use to cook and light lamps—at market price (Rs 50 a litre) from shops like Dharamvir’s. People were promised that the subsidy (Rs 35 a litre) would arrive in their bank accounts, provided they bought kerosene at market prices. The fair price shop was supposed to get the usual commission, 15 paise per litre.

Some 15,500 people rushed to open bank accounts. In January 2012, thousands purchased kerosene at market price, three times the subsidised rate, and waited for the balance. For many, it never came. Daily-wage labourer Bachan Singh says he spent Rs 1,000 on kerosene between January and April but his account at Rajasthan Grameen Bank didn’t ever get the subsidy amount. He started buying wood fuel instead. “We suffer from smoke, extra effort and higher prices, but have no choice.” Since the project began, Dharamvir...



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