The price of LPG refills has risen by more than 50% to over ₹900 per cylinder in November 2021 compared to around ₹600 over 2020.
GS-III: Environment and Ecology (Environmental Pollution and degradation, Conservation of Environment and Ecology), GS-II: Social Justice and Governance (Welfare Schemes, Government Policies & Interventions)
Dimensions of the Article:
- About the Increasing burden of LPG prices
- Council on Energy, Environment and Water (CEEW) Study
- Clean Energy Drive & Concerns
- About Pradhan Mantri Ujjwala Yojana (PMUY) – 1
- Why was PMUY Necessary?
- About PMUY-II
- Survey findings on Success and deficiencies in PMUY-I Implementation
- Way Forward
About the Increasing burden of LPG prices
- The price of LPG refills has risen by more than 50% over the past year. Also, the government has discontinued the refill subsidies since May 2020.
- At the current refill prices, an average Indian household would have to spend around 10% of its monthly expense on LPG to meet all its cooking energy needs.
- Due to the loss of incomes and livelihoods during the novel coronavirus pandemic, the ability of households to afford LPG on a regular basis has taken a further hit.
- The use of solid fuels for cooking comes with a major environmental cost. It is a leading contributor to air pollution and related premature deaths in India. Global Burden of Disease Study 2019 estimated around 600,000 premature deaths every year in India.
Council on Energy, Environment and Water (CEEW) Study
- As per India Residential Energy Survey (IRES) 2020, LPG has become the most common cooking fuel in India. Nearly 85% of Indian homes have an LPG connection and 71% use it as their primary cooking fuel.
- But in the present situation, nearly half of all Indian households will have to at least double their cooking energy expense to completely switch to LPG at current prices.
- The study estimates further suggest that an effective price of ₹450 per LPG refill could ensure that the average share of actual household expenditure on cooking energy matches the pre-pandemic levels.
Clean Energy Drive & Concerns
- LPG has become the primary cooking fuel in around 70% households in India with many efforts like Ujjwala Scheme, consumption-linked subsidies and gradual strengthening of the LPG distributorship.
- However, the prevalent use of biomass as a primary cooking fuel is still continuing.
- The practice of biomass usage is observed in both rural and urban areas. States such as Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal are major contributors in biomass use.
- Free biomass, high LPG prices and lack of home delivery of LPG refills reduce the efficacy of LPG as a reliable and affordable proposition.
- The timely availability of LPG for all consumers is an added area of concern in both rural and urban areas.
About Pradhan Mantri Ujjwala Yojana (PMUY) – 1
- The Pradhan Mantri Ujjwala Yojana (PMUY) is a government scheme launched in 2016 which envisages the distribution of 50 million LPG connections to women below the poverty line.
- PMUY is a scheme of the Ministry of Petroleum & Natural Gas.
- There are 27.87 Crore active LPG consumers in the country, with the PMUY beneficiaries accounting for over 8 crores.
- Advantages of PMUY:
- Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country.
- This measure will empower women and protect their health.
- It will reduce drudgery and the time spent on cooking.
- It will also provide employment for rural youth in the supply chain of cooking gas.
Why was PMUY Necessary?
- As per the estimates of the World Health Organisation (WHO), about 5 lakh deaths in India occurred due to unclean cooking fuel.
- These deaths were caused mostly due to non-communicable diseases including heart disease, stroke, chronic obstructive pulmonary disease and lung cancer.
- Providing LPG connections to families below the poverty line will ensure universal coverage of cooking gas in the country.
- The scheme can be a tool for women empowerment in that LPG connections and clean cooking fuel can reduce cooking time and effort, and in most of India, cooking is a responsibility shouldered solely by women.
- The scheme also provides employment to the rural youth in the supply chain of cooking gas.
- The PMUY-II is aimed to provide maximum benefit to the migrants who live in other states and find it difficult to submit address proof.
- Now they will only have to give “Self Declaration” to avail the benefit.
- The scheme provides a financial support of Rs 1600 for each LPG connection to the BPL households.
- Along with a deposit-free LPG connection, Ujjwala 2.0 will provide the first refill and a hotplate free of cost to the beneficiaries.
- Under Ujjwala 2.0, an additional 10 million LPG connections will be provided to the beneficiaries. Government has also fixed a target of providing piped gas to 21 lakh homes in 50 districts.
Survey findings on Success and deficiencies in PMUY-I Implementation
Positives of PMUY-I
- PMUY-I had overshot its target of giving 80 million free LPG connections according to data from the National Sample Survey conducted by the National Statistical Office (NSO).
- The data also shows that in the last four years (2016-2020), PMUY connections account for 71% of growth in total domestic LPG connections in the country.
- The fact that almost 70% of PMUY beneficiaries are from the bottom 40% of the households, shows the scheme has been remarkably successful in reaching poor households.
Negatives of PMUY-I
- A unit level analysis of data from the NSO shows that 43% of PMUY beneficiaries were not using LPG for cooking. The share of beneficiaries not using LPG for cooking increases down the economic ladder.
- The 2018 NSO survey findings show that the average monthly per capita expenditure (MPCE) of the poorest 20% households in India was Rs. 1,065 – which means a cylinder refill costing Rs. 500 would comprise nearly half of a household’s MPCE.
- Even though PMUY and subsidised LPG consumers receive a subsidy on refill, they have to make the full payment upfront before the subsidy amount is transferred back to them.
- The high cost of gas refills, the CAG report said, has become a constraint in ensuring sustained usage of LPG.
- To be sure, beneficiaries under the PMUY scheme could also opt for a 5 kg cylinder in place of a routine 14.2 kg cylinder.
- The government also allowed swapping the bigger cylinder with the smaller one to make it easier for consumers to get a refill.
- The income-based exclusion limit for LPG subsidy could be reduced to bring deserving beneficiaries under the umbrella.
- Households owning a non-commercial four-wheeler vehicle can be excluded in order to ensure eligible beneficiaries.
- At the earliest, the subsidy must be resumed for the households granted LPG connections under the Ujjwala scheme.
- LPG supply chain, especially in states with a large number of Ujjwala connections and slum population should be strengthened on a priority basis. Higher incentives for rural distributors could play a crucial role in improving the LPG supply chain.
- The Government can encourage and incentivise households to supply locally available biomass to Compressed Biogas production plants being set up under the Sustainable Alternative Towards Affordable Transportation scheme.
- The government could diversify local income and livelihood opportunities through such incentives and also encourage the use of LPG on a regular basis.
-Source: The Hindu