Subsidy cut, LPG dearer by Rs 40 in Delhi

New Delhi: The Delhi government on Monday announced increase in the price of LPG cylinders by Rs 40 each, a move that many Delhiites will find hard to digest in the face of soaring inflation in food prices.

While presenting the annual budget for the national capital in the assembly, Finance Minister AK Walia proposed withdrawing the subsidy on LPG (Liquefied Petroleum Gas) in the state.

Chief Minister Sheila Dikshit said the subsidy was given for LPG when the inflation rate was very high.

"A lot has been spent on the infrastructure in the wake of the Commonwealth Games. We hope that we will be able to cover our losses after this move. There has been a lot of developmental work in the city and more is to happen. So for that, a lot more money is needed," she said

A 14.2 kg LPG cylinder presently costs Rs.285 in Delhi.

Addressing a press conference, Walia said: "This is a growth oriented budget keeping in mind the Commonwealth Games and 'aam admi'. We have exhausted all our resources as we have spent (so) much on Commonwealth Games project and we need more money".

"None of the state governments gives subsidy on LPG, so we have decided to withdraw it too," he said.

The hike in LPG cylinder price came as a shocker for Delhiites.

"I am disappointed as rising food price is pinching monthly budget and this will add salt to injury. I believe they could have withdrawn the subsidy from cooking fuel only after taming food prices," said Sanjay Nanda, a young professional.

Although some the colonies in Delhi have LPG gas pipelines, many people still prefer the gas cylinders.

Sangeeta Singh, a housewife, said: "The middle class had trusted Sheila Dikshit's government and had voted her back to power. This is her way of rewarding them."

Disappointed by the rise in LPG prices, Moushmi Majumdar, said: "It will upset my home budget and I have to cut down on daily expenses. As such prices of essential commodities have gone up and have hit the middle class the most."

The Delhi government also increased the Value Added Tax (VAT) on diesel from 12.5 percent to 20 percent, which will make it Rs.2.37 costlier.

The government has imposed luxury tax on on high-end mobile phones, watches and ready made garments.