Citizens' Issues
Ghost Savings: Govt data shows consumption of subsidised LPG going up
Irrespective of the Petroleum Ministry's inflated claims, during FY2015, actual consumption of subsidised LPG cylinders increased by 18% while the same for unsubsidised refill fell 19%. Even the government's so-called saving claim contains simple arithmetical error of Rs1,205 crore
 
The Central Government, especially the Ministry of Petroleum & Natural Gas (MoPNG), while patting itself for saving thousands of crores due to its direct benefit transfer (DBTL or PAHAL) scheme, continues to show misleading figures. So much so, the clarification issued by the Ministry too contains arithmetical mistake. Not only this, according to the data available in public domain, contrary to the Ministry's claims, actual consumption of subsidised LPG cylinders has gone up by 18% during FY2014-15.
 
In a release on 12 October 2015, the MoPNG had said, "If we take into account the quota of 12 cylinders per consumer and the average LPG subsidy of Rs336 per cylinder for the year 2014-15, estimated savings in LPG subsidy due to the blocking of 3.34 crore accounts work out to Rs14,672 crore, during that year." 
 
So let’s do the calculations... 
12 (refill) x 3.34 crore (blocked connections) x Rs336 (average subsidy for each refill)= Rs13,467 crore
 
This means, even revised figure of the estimated saving by the government is inflated by Rs1,205 crore (Rs14,672 crore - Rs13,467 crore = Rs1,205 crore).  
 
As per the data from the MoPNG, during FY2014-15, total subsidised consumption increased 18% or 16.6 crore cylinders. At the same time consumption of unsubsidised cylinders fell by 19% or by 4.3 crore cylinders. In FY 2014-15, total LPG consumption grew by over 10% relative to FY 2013-14 - a sharp increase on the previous year's growth rate of 4.7%. It must be noted that despite sharp increase in consumption of subdised LPG cylinders, overall subsidy expenditure of the government decreased. This happened due to rapidly falling international oil prices from late 2014 onwards, leading to a 65% decrease in recorded LPG unit under-recoveries between November 2014 and February 2015. Data from MoPNG shows per unit under recoveries for LPG fell to Rs143.7 in March 2015 from Rs506.1 in April 2014. 
 
The significant increase in overall LPG consumption in FY 2014-15 was due almost entirely to a sharp rise in the consumption of subsidized household LPG in FY 2014-15, increasing by almost 18% (the equivalent of 166 million 14.2kg cylinders) relative to FY 2013-14 (see Figure below).
 
 
Due to the UPA administration's relaxation of the per household allocation, and the current government's subsequent failure to reinstate a realistic per household quota, subsidized consumption then rose sharply in FY 2014-15 - increasing by the equivalent of 166.3 million cylinders relative to FY 2013-14 (as detailed in Figure above) - while unsubsidised consumption fell to 13.9% of total consumption.
 
In addition, to the significant increase in subsidized consumption, and despite a strong increase in overall LPG consumption, total unsubsidized consumption (including all categories) fell sharply from its previous high in FY 2013-14, declining by over 19% (the equivalent of 43 million 14.2kg cylinders) (see Figure below). 
 
 
Interestingly, contrary to the Ministry's claims, the consumption of subsidised LPG decreased only when there was a cap. In September 2012, the cap on number of subsidised LPG cylinders (refill) per household was limited to six per year. Later in January 2014, it was increased to nine refill cylinders. Finally, in January 2015, it was increased to 12 LPG cylinders a year. 
 
The effect of the previous cylinder cap was also clearly visible in the composition of LPG consumption in FY2013-14, with total subsidised consumption falling in absolute terms for the first time in a decade. The unsubsidised consumption increased substantially both in absolute terms, growing by 46% relative to FY2012-13 and as a percentage of total consumption. 
 
DBTL or Aadhaar irrelevant in blocking connections
 
The Ministry's latest estimate counts both inactive connections (whose status is unrelated to administrative restriction) and connections blocked over the course of several years. It must be noted here that the vast majority of such connections were identified through mechanisms that preceded direct benefit transfer (DBTL or PAHAL) and Aadhaar, and were unrelated to either initiative. 
 
Connections that would have been valid throughout FY2014-15 were not due to introduction of the DBTL program. This is because DBTL was mandatory only in 8% of total districts for six weeks in FY2014-15. The government assumes these connections would universally have used almost double the average per connection amount of subsidized LPG, and then claims the entirety of the notional savings achieved as due to the introduction of DBTL.
 
In relation with Aadhaar, it must be noted that the program was always effectively irrelevant to the functioning of the DBT mechanism even for the narrow purpose of removing duplicate connections due to the household-based nature of the entitlement. The government's own figures have consistently demonstrated that the maximum number of potential duplicates identified in LPG databases through Aadhaar-based de-duplication is typically around 1% (or less) of total connections assessed, and may represent an even smaller fraction of actual consumption.
 
Where irregular connections were identified and blocked through the adoption of DBTL and Aadhaar in FY2014-15, a category that represents an extremely small fraction of total inactive connections recorded, any notional savings achieved would obviously only relate to the period of implementation of DBTL. Remember in FY2014-15 DBTL was only mandatory in 8% of total districts for a period of six weeks.
 
In other words, the vast majority of blocked connections were blocked through processes entirely unrelated to either DBTL or Aadhaar, during periods when DBTL was not being implemented, and would not have incurred any subsidy expenditure regardless of the adoption of either DBTL or Aadhaar.
 
Basic inquiries regarding the status and composition of the inactive connections, including the percentage of 'inactive' connections formally blocked, and within formally blocked connections, the date of identification and blocking, and the method by which they were identified for blocking, could demonstrate the extent to which this approach to estimating the fiscal effect of DBTL is incorrect or potentially highly misleading. However, it depends upon the will and wish of the Ministry to publish all such data in public domain in a transparent manner.
 

 

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COMMENTS

Mukesh kamath

2 years ago

Did not understand many parts of the argument. Article needs to be rewritten. In a highly activist and anxiety filled state the author has done injustice to many good ideas and a few untruths(added for convenience) like for example concluding hurriedly that aadhaar and DBTL have been irrelevant and ineffective. As if the argument rests on firm footing moneylife quotes these in future articles and has created a web of treatises all waiting to be brought down as a pack of cards.

China cuts RRR, interest rates
The People's Bank of China (PBOC) cut the reserve requirement ratio (RRR) of banks and benchmark interest rates on Friday.
 
From October 24, the RRR for financial institutions will be slashed by 0.5 percentage point, Xinhua news agency reported.
 
The RRR for qualified financial institutions supporting small and micro companies and agriculture will be lowered by another 0.5 percentage point, the PBOC said.
 
Benchmark interest rates will also be cut. From Saturday, interest rates for one-year lending and deposits will be cut by 0.25 percentage point to 4.35 percent and 1.5 percent respectively, PBOC said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Humane definition of Health
When you get up in the morning, if you have the enthusiasm to be of some use to someone everyday, you are healthy. You can then forget the WHO's definition of health
 
"It takes more than just a good looking body. You've got to have the heart and soul to go with it."- Epictetus
 
I was attending a big conference, called the symposium, at the University of Central Florida  Medical School, which had in attendance some of the leading lights of western scientific reductionist (vivisectionist) research. They ranged from those touched by Her Majesty's sword (Sir), or were Fellows of Isaac Newton's Royal Society to those that were nominated for the Nobel and may soon to get it. Most of them talked about inflammation as the root cause of atherosclerosis. At the end it was my turn, a villager from India, to talk about definition of health. Who is interested in that dry subject where there is nothing to get at the end of the day? If all became healthy where is this trillion dollar business, the medi-business?
 
One by one, the great researchers left the auditorium when I started and some before the start after lunch, an unusual experience for me. But the young students and some of my colleagues from India who had to, per force, did stay back. So I had some audience at the end. I tried to do justice to the title to the best of my abilities. One of the senior members in the audience said that my speech did not have the usual punch. Little did he realise my plight when I was seeing the big "guns" leaving one by one. I was happy that the Dean of the medical college stayed back for courtesy’s sake. I then thought I better put my thoughts, which I expressed there that day in print so that the readers could judge for themselves at the end of the day. I also thought I should put my thoughts on inflammation as the root cause of all ills man is heir to. My suspicion is that many powerful drug companies are ready with a host of anti-inflammatory molecules, which they want to push down the patients' throats with the help of these great researchers. That is what research these days is all about.
 
Kathryn A Taubert, PhD, of the American Heart Association sums up her opinion about inflammation and heart disease in the following words:  "More than 80 million people in the US have some form of cardiovascular disease (CVD)—for example, coronary heart disease, stroke, high blood pressure, or heart failure—and millions of others are at increased risk for these diseases. Over half of these people are also affected by arthritis and other disorders of the musculoskeletal system—the muscles, bones, joints, ligaments, tendons, and bursa. The pain associated with these chronic conditions is often treated with a class of medications known as nonsteroidal antiinflammatory drugs (NSAIDs). However, it has been shown that taking some NSAIDs can increase a person’s risk of having a heart attack or stroke. This risk is likely greatest in patients who have a prior history of CVD or who are at high risk for CVD. The information here will help you to understand what NSAIDs are and whether it is safe to take them.”
 
Newer studies funded heavily by drug companies however have a different story. "There is a decreased risk with methotrexate (MTX) use. The current evidence suggests that MTX use is associated with a reduced risk of CVD events in patients with RA. This suggests that reducing the inflammation in RA using MTX not only improves disease-specific outcomes but may also reduce collateral damage such as atherosclerosis. (But methotrexate is not an anti-inflammatory molecule. It is an anti-metabolite and it's reducing the risk does not mean that inflammation is the be all and end all of atherosclerosis.) TNF (tumour necrosis factor) inhibitor is another molecule the drug companies are after. They have been able to convince the world that combination of methotrexate and TNF could be a great improvement in treating inflammation in many situations. No one talks about the serious side effects these two drugs could have in the long run. Apart from any others a new blood cancer has also been attributed to TNF. Sitting there in the auditorium for 36 long hours listening to the varieties of studies showing the wonderful effect of inflammation in atherosclerosis was amusing, each one of them patting the other on the back. Today only this kind of vivisectionist research excites researchers, their funders and even the Nobel and Lashkar committees. Have we lost the woods in counting the trees? I can understand the funding sources have their vested interests. No industry wants its stakeholders to lose money but what of us doctors who are trained to keep society healthy? My worry is should we be used as pawns in their game?
 
I was expecting at least one of those great thought leaders would mention that some safe TNFs are there in the innocent Indian spice Turmeric (curcumin). Now that the Nobel committee picked up Chinese herbal medicine artemisinin for Nobel, may be they will look back at curcumin! 
 
I strongly feel that if we change our educational system to produce "healthy" minds instead of just "wealthy" careers we would have humane researchers who would look at human problems through the holistic glass instead of looking at human beings in bits and pieces in their reductionist research. When the industry is in cahoots with scientific research, poor sick population suffers, why even the well segment of the population suffers thanks to the Alma Ata definition of health which, in short, says that health is absence of disease, which boils down to getting oneself screened to know if one is healthy. This WHO definition of health is a damagingly negative and serves only vested interest in the industry and their minions and not the common man. In the presentations, one thing came out stealthily is that if statins are given in real big doses (note the stress on dose) it becomes anti-inflammatory. How did statin suddenly become anti-inflammatory? If it does it could be dangerous as all the NSAIDs have killed people due to heart attacks and as such could not be anti-atherosclerotic.
 
I am reminded of what that romantic British poet wrote when the first industry started in England at the beginning of the so called the industrial revolution in 1802 AD.
 
The world is too much with us! The first four lines go like this:
 
"The world is too much with us; late and soon,
Getting and spending, we lay waste our powers;
Little we see in Nature that is ours;
We have given our hearts away, a sordid boon!"
                            William Wordsworth. 1802
 
How very true in medical industry funded research? This malady affects all medical research especially in the area of cancer research. Even the very foundation of the theory of atherosclerosis, Ancel Keys six-country study, was not authentic!
 
Indian Ayurveda has a very fine and ideal definition of health, which I call as humane definition as the latter allows the hapless human being to find out if he is ill or well without going to the doctor and without the need for expensive regular check-ups. Sushruta, the great Ayurvedic surgeon, had this definition in his text stanza: 12.7
 
The exact transliteration in English goes thus:
 
"The one who is established in the self and always full of bliss, whose doshas are all balanced, whose Agni is also balanced, whose dathus are in equilibrium, whose body excreta and impurities are removed in an orderly regular way, and whose mind and senses are also established in bliss- such an individual should be termed a healthy person. "
 
The contextual meaning simply is that when you get up in the morning if you find that you have enthusiasm to work selflessly and also at the same time have the enthusiasm to be of some use to someone everyday, you are healthy. If the answer to the above two questions are in the negative you might need help to get back your health.
 
Work is worship if this world has to go on. Compassion is at the root of our very existence on this planet. But for the generous donation of genes from the germs, our ancestors for two billion years on is planet, we would not have been here today. We are that nucleated cell that was born out of the DNA donation by germs. (Elisabet Sahtouris) We were the single nucleated cell, the zygote, in the mother's womb which multiplied into hundred odd trillion cells today as a happy colony of those human beings (nucleated cells) along with ten times that number of germ cells which are both incorporated inside our genes and others living in symbiosis with us for our good. The billions of germs in our gut manage our immune system, the shield against diseases.
 
Western medical science can only answer the question as to how does one get ill? But not the question why does one get ill? Now that we know that the human mind is the human body as an illusion, we understand that all diseases start and end in the human mind, human consciousness, which is not situated in the brain. Wilder Penfield, the Nobel winning Canadian neurosurgeon, did write that the mind does not reside inside the brain as recently as 1970 long before quantum physics showed that the body and the mind are but the two faces of the same coin. But the human consciousness, the mind, is a part of the universal consciousness, the universal mind. Just as Ayurveda had said the self healing capacity of the human body is very powerful. Recent study did show that to be true even in western medicine (Bingel et. al. The placebo Effect. Science Translational Medicine 2011; 3: 70) If I have to sell this self-healing in the west I better call it as quantum healing.
 
"A wise man should consider that health is the greatest of human blessings, and learn how by his own thought to derive benefit from his illnesses."
                                                                       -Hippocrates
 
 
(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS.)

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