×

UPSC Courses

editorial plus

Editorial Plus

Pradhan Mantri Ujjwala Yojana-Analysis

  • 08 March, 2021

  • 5 Min Read

Pradhan Mantri Ujjwala Yojana-Analysis

Introduction

  • Subsidised LPG prices have increased by a massive 50% in this financial year alone, consistently capturing headlines.

About Pradhan Mantri Ujjwala Yojana:

  • Launched in May 2016.
  • To provide LPG (liquefied petroleum gas) connections to poor households.
  • A deposit-free LPG connection is given to eligible with financial assistance of Rs 1,600 per connection by the Centre.

Eligibility

  • Applicant must a woman above the age of 18 and a citizen of India.
  • Applicant should belong to a BPL (Below Poverty Line) household.
  • No one in the applicant’s household should own an LPG connection.
  • The household income of the family, per month, must not exceed a certain limit as defined by the government of the Union Territories and State Government.
  • Applicant must not be a recipient of other similar schemes provided by the government.

Objectives

  • Empowering women and protecting their health.
  • Reducing the serious health hazards associated with cooking based on fossil fuel.
  • Reducing the number of deaths in India due to unclean cooking fuel.
  • Preventing young children from significant number of acute respiratory illnesses caused due to indoor air pollution by burning the fossil fuel.

Did PMUY achieve its intended benefits?

  • Providing an upfront connection subsidy of ?1,600, PMUY helped expand LPG coverage to more than 85% of households.
    • In comparison, less than a third of Indian households used LPG as their main cooking fuel in 2011.
  • However, multiple studies assessing PMUY concluded that while access has increased, many new beneficiaries are not consuming LPG in a sustained manner.
  • Large-scale primary surveys by the Council on Energy, Environment and Water (CEEW) suggest that, on average, recent PMUY beneficiaries consumed only about half the LPG compared to long-standing regular consumers.

Reasons for poor uptake of LPG by poor people

  • Limited uptake of LPG among poor households has two main reasons.
    • First, the effective price of LPG is not affordable for such households, despite the subsidy.
    • Second, many rural consumers have access to freely available biomass, making it difficult for LPG to displace it.
    • Beyond causing indoor air pollution, biomass use for cooking contributes up to 30% to the ambient PM2.5 at the national level, more than the contribution of transport, crop residue or coal burning.

Changing prices

  • The recent increases in the subsidised LPG price have made it more difficult for the poor to sustain LPG use.
  • India determines domestic LPG prices based on imported LPG price (we import more than 50% of our consumption).
  • The government’s lack of transparency in the pricing of subsidised LPG adds further to the citizen's plight.

Better targeting

  • The answer lies in better targeting of subsidy.
  • Currently, the government provides a uniform subsidy per cylinder to all LPG consumers (PMUY or otherwise).
  • Many long-term LPG users, who are also middle- and higher-income households, will continue to use LPG even at a (higher) unsubsidised price.
  • In contrast, economically poor households need a greater subsidy to make it affordable for them to use LPG as their main cooking fuel.
  • One approach for such targeting is to rely on the existing LPG consumption patterns of consumers.
  • Provide households exhibiting low consumption or a decline in LPG consumption over time with greater subsidy per cylinder to sustain health gains.
  • Further, the subsidy levels could be dynamic with different slabs reflecting the previous year’s consumption.

Conclusion

  • In the post-pandemic rebuilding, the continued support to the economically poor for sustaining LPG use is not merely a fiscal subsidy but also a social investment to free-up women’s productive time and reduce India’s public health burden.
  • This social investment will yield rich dividends in the years ahead through a healthier and productive population.

 

Source: TH

Students Achievement

Search By Date

Newsletter Subscription
SMS Alerts