More Ghost Savings: Understanding the fiscal impact of India’s direct transfer program — Update

This policy brief by the International Institute for Sustainable Development (IISD) analyzes the fiscal impact of India's Direct Benefit Transfer for Liquefied Petroleum Gas (DBTL), also known as PAHAL. The document challenges claims by the Ministry of Petroleum and Natural Gas (MoPNG) regarding subsidy savings, arguing that the program likely resulted in a net fiscal cost in FY 2014/15 due to implementation expenses and the fact that most irregular connections were blocked through prior, non-DBTL processes.

• The IISD disputes the Ministry of Petroleum and Natural Gas (MoPNG) claim that the DBTL scheme saved Rs. 14,672 crore (USD 2.2bn) in FY 2014/15. Using a consumption-based methodology, IISD estimates the maximum theoretical saving on subsidy expenditure for that period was approximately Rs. 143 crore (USD 21 million).
• When accounting for implementation costs, the DBTL program likely resulted in a net fiscal loss for FY 2014/15. The government allocated Rs. 200 crore for implementation and spent at least Rs. 40 crore on transfer commissions, leading to a calculated maximum net saving of approximately minus (-) Rs. 97 crore (USD 14 million).
• The MoPNG's claim of blocking 33.4 million connections via DBTL in FY 2014/15 is described as a 'technical impossibility' because the program was only introduced nationwide in January 2015 and was mandatory in only 8% of districts for six weeks. Most connections blocked by March 31, 2015, were identified before DBTL's launch through methods unrelated to DBTL or Aadhaar.
• Aadhaar-based deduplication was significantly less effective than simple list-based deduplication. While list-based methods identified 18–19% of total connections as potentially irregular, Aadhaar-based deduplication identified approximately 1% or less. The maximum gross saving from Aadhaar-based deduplication in FY 2014/15 is estimated at Rs. 12 to 14 crore (USD 1.8-2.1 million).
• The document argues that non-DBT reforms, such as the household cylinder cap and connection validation measures, are more cost-effective and equitable. It suggests that the focus on direct transfers has hindered the adoption of simpler reforms for other products like food grains and kerosene.

APA

Clarke, K. (2016). More Ghost Savings: Understanding the fiscal impact of India’s direct transfer program — Update. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/more-ghost-savings-india-direct-transfer-program-policy-brief.pdf

Chicago

Clarke, Kieran. More Ghost Savings: Understanding the fiscal impact of India’s direct transfer program — Update. International Institute for Sustainable Development, 2016. https://www.iisd.org/system/files/publications/more-ghost-savings-india-direct-transfer-program-policy-brief.pdf.

Wikipedia

{{cite report |last1=Clarke |first1=Kieran |title=More Ghost Savings: Understanding the fiscal impact of India’s direct transfer program — Update |publisher=International Institute for Sustainable Development |date=February 2016 |url=https://www.iisd.org/system/files/publications/more-ghost-savings-india-direct-transfer-program-policy-brief.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clarke2016more, author = {Clarke, Kieran}, title = {{More Ghost Savings: Understanding the fiscal impact of India’s direct transfer program — Update}}, institution = {International Institute for Sustainable Development}, year = {2016}, month = feb, url = {https://www.iisd.org/system/files/publications/more-ghost-savings-india-direct-transfer-program-policy-brief.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }