Pratyaksh Hanstantrit Labh / Direct Benefits Transfer For LPG

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PAHAL (DBTL) has been introduced to curb the diversion of subsidized LPG. Under the scheme, Consumers will pay the market price for the domestic cylinder and the subsidy will be transferred directly to their bank account. This removes the incentive to divert the domestic LPG cylinders, which moved in the supply chain at almost half of their real market price.

Before PAHAL, the LPG supply chain was opaque and LPG consumers were powerless and were at the mercy of the distributors in a monopoly market structure. The government on the one hand wanted to overcome these obstacles and deliver good services to citizens and on the other hand, wanted to reduce their subsidy burden by curbing the diversion of subsidized cylinders meant for domestic consumers into the commercial market.

To infuse transparency and efficiency into the supply chain of LPG, a framework was needed which would lead to better management of subsidies and a reduction in the burden on the exchequer. Hence, the government decided to launch PAHAL or Direct Benefits Transfer for LPG (DBTL) scheme for LPG consumers across the country. PAHAL solves the twin problems of lack of accountability leading to poor consumer service and diversion leading to leakages in LPG subsidy.

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PAHAL (DBTL) was designed to ensure that the benefit meant for the genuine domestic customer reaches them directly and is not diverted. PAHAL (DBTL) also ensures that precious public money is saved by eliminating diversion. Further, LPG customers who do not wish to avail of the LPG subsidy can choose to Opt out of the subsidy using “Form 5” which can be submitted to the distributor. Consumers can also register and exercise this option by visiting and accessing OMC’s portals. Around 9000 citizens have already voluntarily given up the LPG subsidy so far.

The DBTL scheme was rolled out in 291 districts in the country from 1st June 2013 in six phases. The scheme covered nearly 10 crore consumers and over 3770 distributors across the three PSU Oil Marketing Companies. The DBTL scheme launched earlier required the LPG consumer to mandatorily have an Aadhaar number for availing LPG subsidy. The modified scheme has been re-launched in 54 districts on 15.11.2014 in the 1st phase and in the rest of the country on 01.01.2015. This not only will prevent diversion but also will allow us to detect duplicate connections against the same individual. Under the modified DBTL scheme (PAHAL), in effect now, each LPG consumer will link his Aadhaar number in the LPG database and in the bank account database, and then the subsidy will be routed to the individual bank accounts in accordance with the delivery of LPG cylinders. Alternatively, LPG consumers who do not have an Aadhaar number can also get subsidies into their bank account by simply linking their Bank Account with their LPG database.

Such a consumer will be called Cash Transfer Compliant (CTC) once he/she joins the scheme and is ready to receive a subsidy in his/her bank account. The LPG consumers who had already joined the scheme earlier and had received the cash subsidy in their bank accounts do not need to do anything further. To confirm this they can either contact their LPG distributor or visit and access the individual OMC’s portals. Such consumers will start getting the LPG subsidy directly into their bank account as soon as the scheme is launched in their district.

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Those consumers who didn’t join the scheme earlier but have their Aadhaar number with them can join the scheme and become CTC by getting the same seeded with their LPG distributor as well as with their banks. For those who are not yet enrolled with UIDAI and don’t have an Aadhaar number can also join the scheme and become CTC by getting their bank details seeded into the LPG database.

Objectives –

The following are the key objectives of the scheme –

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a) Remove incentive for diversion.

b) Protect entitlement and ensure subsidy to the consumer.

c) Improve the availability/delivery of LPG cylinders for genuine users

d) Weed out fake/duplicate connections

e) Allow Self Selection in subsidy


A. Government of India

i. The launch of PAHAL (DBTL) will reduce the subsidy burden due to:

a) Elimination of supply chain leakages and unauthorized usage.

b) Allow consumers to opt out of subsidy, and

c) Reduction in multiple connections by way of Aadhaar-based De-duplication.

ii. Improvement in public service delivery.

B. LPG Consumers

i. LPG Consumers get LPG subsidies in cash directly in their bank account automatically.

ii. With the removal of the incentive for diversion, the entitlement will be protected

iii. Improved availability of new LPG connections in the market.

iv. Reduction in back-log due to reduced diversion

C. Oil Marketing Companies (OMC)

i. Reduction in administrative overheads due to:

a) Lesser policing

b) Reduction in grievances related to unauthorized usage, diversion, and delayed deliveries.

c) Public auditing of Subsidy

ii. Allow focus on consumer relationship management

iii. Improved quality of consumer database which can be leveraged for better data mining leading to improved services.

iv. Removal of multiple connections / fake & ghost LPG consumers.

v. Reduction in product shortage and better management of imports.


LPG users and their spouses who do not earn a taxable income above ₹10,00,000 in the previous financial year according to the Income Tax Act of 1961 can qualify to apply for this scheme.

Application Process


Applicants can join the PAHAL scheme online in two following ways-

Linking Aadhaar Card with Bank Account

Download Form 1 from Individuals without internet access can collect the same from a gas distributor. Fill in the required details such as name, bank account number, etc. Submit this duly filled form to the LPG distributor or respective bank.

Following this procedure, applicants must fill out Form 2 to link their Aadhaar number with an LPG connection. Individuals can complete this process online via the UIDAI official website. Alternatively, they can submit the duly filled form and the Aadhaar card pasted on it to the respective LPG distributor. Applicants can also register for this scheme by utilizing the IVRS or SMS facility.

Without Linking Aadhaar Card

If users do not own an Aadhaar card, they can register through their savings account using Form 3 or Form 4. Provide bank account details, including IFSC code, account holder’s name, account number, etc., in the form. Or else, ask the bank to link the bank account with a gas connection to receive the subsidy directly.

Documents Required

  • Form 1 – Submit a copy of the Aadhaar letter to the LPG distributor or bank
  • Form 2 – Aadhaar letter, in addition to residential proof, to be submitted to the LPG distributor
  • Form 3 – A copy of a current refill slip consisting of a 17-digit LPG ID number
  • Form 4 – A copy of a bank passbook’s front page and a canceled cheque
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