Finance Minister Arun Jaitley says govt may do away with LPG subsidy for rich

Finance Minister Arun Jaitley said on Friday that the government is considering doing away with the LPG subsidy for the well-off.

"The next important decision India will have to take is whether people like me...(are) entitled to get our LPG subsidy," Jaitley said at the HT Leadership Summit in the national capital.

"I think the sooner we are able to take these decisions as to who is entitled to these subsidies, of course some people would be, the better it would be for our system. These decisions are all on our agenda," he added.

Currently, 12 cylinders are available to consumers at a subsidised rate of Rs 414 each (in the national capital). Any requirement beyond this will have to be purchased at the market price of Rs 880 per 14.2-kg cylinder.

The Finance Minister said, "Once political leadership, particularly the man on the top, has decisiveness, the most complicated of the decisions will also become simple. One does not have to wait for years to decide on coal blocks or what to do with spectrum or natural resources, or with diesel pricing or with gas pricing."

Some of these decisions had been complicated over the years, but the new government wasted no time and simply took a call on them Jaitley said.

The Finance Minister further said that the country is at a crucial stage where we must not exhaust our patience as global investors are looking at the country with renewed interest.

After coming to power, the government led by Prime Minister Narendra Modi deregulated diesel prices and linked them to the market rate. Earlier, the government used to provide subsidy on diesel.

Jaitley said he was almost ready with the proposal on the Goods and Services Tax (GST) and was confident that the Constitution Amendment Bill on it would be introduced in the next Parliament session starting Monday.

Referring to long-pending Insurance Bill, he said the government was on the verge of opening the sector a little more. The Bill proposes to increase foreign direct investment limit in the insurance sector to 49 per cent from the current 26 per cent.

Underscoring his concern about the state of th economy, the Finance Minister said it would be hard to hit tax revenue targets in the current financial year, with weak credit demand underscoring his concern about the state of the economy.

Jaitley said that while he expected to hit targeted levels for direct taxes, reaching the goal for indirect taxes would be a "challenge".

A Finance Ministry source said earlier that economic growth in the financial year ending March 31, 2015, was likely to come in near the lower end of the 5.4-5.9 per cent forecast range in the budget, while tax receipts may fall short by Rs 70,000 crore ($11 billion).

(With inputs from Reuters)