Manush Shah
PROBLEM
Despite record levels of electrification in the country, the challenge to provide access to clean cooking fuel is still a persistent problem. The disparity among states in this context is stark in nature. States like Telangana and Goa have more than 90 percent coverage rate while in states of Jharkhand and Bihar, the rate is as low as 30 percent. Solid fuel usage leads to 13% of all morbidity issues in India. The rural population isn’t majorly aware of the harmful and obnoxious effects of cow dung and firewood as a fuel source. This puts women and children directly at a risk of various diseases. Hence, it is extremely necessary to provide accessibility and then ensure its affordability as well.
BACKGROUND
Launched on May 1st, 2016 in Ballia, Uttar Pradesh by our PM Narendra Modi, PM Ujjwala Yojana promotes the usage and access of LPG to all households in India. It is a centrally sponsored scheme under the Ministry of Petroleum and Natural Gas. By March 2020, it planned to provide 8 crore LPG connections to low-income homes. The scheme’s supply of 8 crore LPG connections has also contributed to an increase in LPG coverage from 62 percent on May 1, 2016, to 99.8 percent as of April 1, 2021. It mentions the women as stakeholders here who can prevent themselves from the smoke that comes from firewood by using the LPG for cooking.
OBJECTIVES
- Provide clean cooking fuel solution to poor households (BPL card holders) especially in rural areas
- Prevent the health implications on rural women and children due to the use of cow dung, kerosene or firewood.
- To lessen and ultimately control the environmental pollution caused due to the usage of fossil fuels, which causes a variety of respiratory ailments.
- To empower women, especially those hailing from socio-economically weaker strata of the society.
FEATURES
The salient features of this scheme are:
- Applicants (woman only) must have attained 18 years of age.
- There should not be any other LPG connection from any OMC in the same household.
- Adult woman belonging to any of the following categories – SC, ST, Pradhan Mantri Awas Yojana (Gramin), Most Backward Classes (MBC), Antyodaya Anna Yojana (AAY), Tea and Ex- Tea Garden tribes, Forest Dwellers, People residing in Islands and River Islands, enlisted under SECC Households (AHL TIN) or any Poor Household as per 14-point declaration.
- Each beneficiary receives a cash grant of Rs.1,600 to obtain a new connection without a deposit, enhancing access to energy.
- The connections are given in the name of the women heads of households.
FINANCIAL STRUCTURE
This is a fully centrally funded scheme which covers the cash transfer required for the pressure regulator and the cylinder. However, the cost of gas stove and refills has to be borne by the beneficiaries itself. States like Assam, Arunachal Pradesh, Jharkhand and Chhattisgarh have stepped up to pay for the installation of the gas stove. Thus, from the total amount of Rs. 3107, these state governments bore the cost of Rs.990. The details of the breakup and total expenditure by these states is given in Annexure.
The budgetary allocation for the same was Rs. 8,000 crore and Rs. 4,800 crore were added later in 2018. The funds are also drawn from the money saved under the GiveitUp campaign which encouraged the well-off citizens of the country to give up their subsidy which can be put to use in Ujjwala scheme for the required beneficiaries. LPG Connections are highly subsidized in the country and it puts a huge financial burden on the government. The CSR funds are also directed to the Ministry of Petroleum and Natural Gas.
NATURE OF POLICY
PM Ujjwala Yojana falls under the ambit of distributive policies as it is focused on particular sections of the society that is the BPL women and their families in this case. It thus collects payments from the whole citizenry but the benefits of it are provided to the underprivileged few. Such policies are formulated in order to target the certain segments of the society but they require the public assistance and cooperation from all. For example, under the Give it Up campaign, good samaritans who are giving up their subsidies are used to finance the LPG connections of rural households.
The idea is to uplift, empower and make the vulnerable sections of the society aware about the services, in this case, LPG connections. Hence, PMUY is a classic example of Distributive Policy.
ASSESSMENT
The points of success are its efficient implementation and adherence to deadlines. It had set a deadline of covering 8 crore households by December 2020 which it completed in 2019 itself.
There have been major problems in data validation as stated in the CAG report on the scheme. The beneficiaries were supposed to be adult females but the benefits of this scheme were also extended to the males, girls under the age of 18 years and duplicate names. There was a mismatch in the name of 12.46 lakh beneficiaries in total.
Another serious concern of the usage of non-standard equipment in the process along with unsafe methods and practices of installment were observed in more than 18,558 cases.
The casual management of finances and the non-usage of critical CSR funds have resulted in 261 crore rupees lying idle. Thus, non-utilization of funds on one hand and the non-payment of dues to the OMCs have created a challenge for the government.
It has made lofty claims of increasing the national fuel coverage to more than 98%, however, the official figures show that the actual increase in usage of clean fuel is a mere 20% as the national average. A contrasting picture is presented by the National Family Health Survey (NFHS-V), which was published last month.
In the first phase, the union government has disclosed information on 22 states that demonstrate an increase in actual clean cooking fuel usage of about 20% from 2015–16 to 2019–20.
According to the report, 37.8% of families in Bihar, both urban and rural, use clean cooking fuel. According to the previous NFHS, roughly 17% of families in the state were utilizing clean cooking fuels in 2015–16, prior to the beginning of the programme.
The major criticism stems from the fact that the government seems to have shed its responsibility once they have delivered the cylinders. However, the real usage depends on the number of refills which is way too low. A lot of households have taken the cylinder, but are not using it currently. A latest government survey itself said that still only 60% approximately of households use LPG while the rest rely on firewood itself. This clearly contradicts the claims made by the government.
The other fundamental problem with this lies in the fact that refilling is a cumbersome task and a costly one as well. Each refill costs around 700 rupees and it is certainly difficult for BPL families to afford it during pandemic, demonetization and economic slumps that we have been facing right now. The map given in the annexures studies the number of average refills per state and the numbers are at an abysmal low which suggests that the population still uses indigenous sources of fuel. The national average for refills per year is a mere 3.66 refills.
However, it is noteworthy that during pandemic, the government had under the PM Garib Kalyan Package provided the free refill to the beneficiaries but the extent of it was limited.
Lack of incentives for a sustained use of LPG doesn’t encourage people to use it. Reports have come that in some states like Uttarakhand only 1% of cylinders go for a refill which defeats the whole purpose of having this policy. Failures in the credit transfers for subsidy amounts on time and the ever-increasing rates of LPG have forced people to not refill them. Frequent price hikes in a period of a quarter makes it really difficult for people who are earning less than the minimum wage everyday to be able to afford the refill.
The subsidies that are credited in the bank accounts are also often just 1/3rd of the amount of refill and in most cases definitely not enough. The consumption has risen only by a small amount and the usage of coal and firewood is still very high in states like Uttar pradesh and Bihar. Even the gas agencies have seen a drop in about half the number of registered beneficiaries. Many times the subsidy amount isn’t raised proportionately to the rise in the LPG prices.
Since March 2021, LPG cylinder prices have been soaring. For instance, on August 1, 2019, the price of an LPG cylinder in Delhi was Rs. 574.50. It got worse before the Covid-19 pandemic-related lockdowns were publicised. LPG cylinder costs were below Rs 600 for three months as worldwide demand decreased. It has never fallen lower than Rs 700 since February 2021. It varied between Rs 809 and Rs 999.50 between March 2021 and May 2022. However, it passed the Rs 1,000 milestone on May 19 and was valued Rs 1,053 as of July 6.
However, widening the perspective of analysis of this scheme might help for a better assessment. Usually, in various countries it is noticed that the transition to LPG from indigenous energy sources isn’t easy or fast by any means. The scheme is an access-based policy which gives the access or chance to the people to use it.
Access shouldn’t be the only achievement since it has done fairly well in that aspect. However, access is only the first step towards regular usage of LPG — it is a necessary but not a sufficient condition to bolster usage. Behavior change involves the one-time, unfamiliar dot behavior (new LPG purchase), short-term unfamiliar span (new behavior during first few weeks/ months of LPG usage) and long-term familiar path behavior (effortful span behavior turning into the spontaneous habit over time). Each of this requires different types of intervention — the Ujjwala scheme is primarily tackling the first type of behavior.
Each of these steps, which involves a gradual process of making this a habit, involves various measures that tackle these problems. The policy should focus on awareness building and more on informative content and messaging that encourages its use over other available options.
The CAG report flagged various concerns ranging from diversion of cylinders for commercial uses, the cylinders being given to the minors and the delay in the KYC process which led to delays of upto 6 months in the services. The Oil Managing Companies were also not reimbursed for the subsidies with due payments left.
CONCLUSION
The policy is good in its intention and initial implementation, it needs restructuring and allotment of funds to finance the gas stove and other expenses borne by the beneficiaries. It is important to note that Ujjwala 2.0 which was started in 2021-22 had a target of 1 crore beneficiaries for the migrant workers in specific. Thus, this doesn’t require them to have address proofs and at the same time it also pays for the installation cost of the gas stove. It is high time that the government starts giving out subsidies on time, keeps the prices on a minimum average without major fluctuations and pay the outstanding amount to the OMC companies.
Hence, the policy needs various interventions and effective usage of policy instruments to achieve its stated goals within the stipulated time.
RECOMMENDATIONS
- Massive safety campaigns should be carried out and an incentive-based system should be brought in for those beneficiaries who have undergone adequate safety measures.
- Efficient creation of a database to be made in order to avoid any discrepancies and duplication of names. The benefits associated with the minor beneficiaries should be shifted to the name of adult females.
- The idle funds in the CSR category should be immediately used and outstanding dues should be cleared.
- The subsidies should be delivered to on time and these should be increased proportionally to the increase in the LPG prices
- There have been multiple delays of more than 365 days which have been observed in more than 4.3 lakh connections. It should be ensured that OMCs do not delay the process and if any sort of delay happens, the OMCs should be penalized.
- The government should invest more in the awareness and information campaign which can encourage beneficiaries to continue usage of LPG which can lead to an overall increase in the number of refills countrywide.
ANNEXURE
REFERENCES
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Report No.14 of 2019 – Performance Audit of Pradhan Mantri Ujjwala Yojana, Ministry of Petroleum and Natural Gas. (n.d.). CAG. https://cag.gov.in/en/audit-report/details/55961
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About the Contributor
Manush Shah is a Research Intern at IMPRI. He is currently pursuing his B.A. in Economics, Media Studies and Political Science from CHRIST (Deemed to be) University, Bangalore.
