Indebtness in simple terms means ‘an obligation to pay money to another party’
As per newspaper reports, consumers will have to pay the full market rate for LPG, fertilizer, Kerosene etc at the time of purchase, and later on the subsidy amount will be credited to the consumer’s bank accounts.
The process flow envisaged as under. Eg: LPG
01) The LPG consumer pays Rs1100/-(market price) to the gas dealer irrespective of the number of cylinder in the financial year.
02) The subsidy as decided by the Government will be credited to the consumers’ bank account.
03) The time-lag between the consumer payment to the dealer and the receipt of the subsidy to the bank account, is not yet defined.
04) This means that initially the consumer will have to invest the full amount and wait for the subsidy. In case, the consumer does not have the full amount upfront, he/she has to borrow.
05) Naturally there will be a cost associated with the borrowings. This cost will increase the consumers’ indebtness.
Yes, the success of the Cash Transfer Scheme will depend on the minimal time-lag between the purchase at market rate and the receipt of the subsidy.
Read here for a ground report on the Pilot project in Rajasthan
Re-disseminated by Prashant N. Banker by daytime, Blogger by night.
- 9 LPG cylinders this year if oil companies get extra Rs 3,000 crore (thehindu.com)
- ‘Direct cash transfer not violation of poll code’ (thehindu.com)
- Check LPG Gas Refill,Cylinders Usage,Indane,HP Details (ramanan50.wordpress.com)
- PM rolls out direct cash transfer of subsidies (news.in.msn.com)
- PM asks ministries to implement cash transfer scheme urgently: 10 latest developments (ndtv.com)