Insights into Editorial: Clearing the smoke on LPG reform

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Insights into Editorial: Clearing the smoke on LPG reform

12 April 2016

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The Cabinet Committee on Economic Affairs, in March 2016, approved a scheme to give free cooking gas connections to poor women. The scheme is known as “Pradhan Mantri Ujjwala Yojana”.

About the scheme:

Under the Pradhan Mantri Ujjwala Yojana, Rs.8,000 crore has been earmarked for providing 50 million LPG (liquefied petroleum gas) connections to poor households.

  • Each beneficiary will get financial support of Rs.1,600 for securing an LPG connection.
  • Eligible households will be identified in consultation with state governments and Union territories.
  • The scheme will be implemented over the next three years.
  • The scheme is being implemented by the Ministry of Petroleum and Natural Gas.

Significance of this scheme:

This is not a new idea. Subsidised LPG connections to BPL households have been provided under various schemes even earlier. However, the scale of this programme is what sets it apart.

  • Until 2013, 75 lakh predominantly rural, subsidised BPL connections were disbursed under various schemes.
  • 55 lakh subsidised BPL connections are claimed to have been provided in the last year under the “Give Back” scheme linked to the “Give It Up” campaign.
  • In comparison, the PMUY aims to provide subsidised connections to five crore households in three years.

What makes LPG adoption necessary?

  • About 75 crore Indians, especially women and girls, are exposed to severe household air pollution (HAP) from the use of solid fuels such as biomass, dung cakes and coal for cooking.
  • A report from the Ministry of Health & Family Welfare places HAP as the second leading risk factor contributing to India’s disease burden.
  • According to the World Health Organization, solid fuel use is responsible for about 13% of all mortality and morbidity in India (measured as Disability-Adjusted Life Years), and causes about 40% of all pulmonary disorders, nearly 30% of cataract incidences, and over 20% each of ischemic heart disease, lung cancer and lower respiratory infection.

However, there are few more issues which need to be addressed:

  1. Cooking fuel should be available at an affordable cost:

Each BPL household would have to spend up to Rs.5,000 each year on LPG even at current subsidised prices — in addition to a one-time cost of Rs.1,800 for the connection — which may be unaffordable to many.

  • The PMUY has proposed payment in instalments for stoves and cylinders to address this challenge, which is welcome. In addition, it may consider increasing LPG subsidies for the first few cylinders bought in a year by BPL households.
  1. Distribution system needs to be strengthened:

The distribution system needs to be strengthened to be able to meet the expected increase in demand, particularly in rural areas, as non-availability of fuel could push people back towards using solid fuels.

  • Ensuring reliable, sustained, last-mile supply would require multiple steps. It requires a large extension of distribution networks, especially in rural areas, since each rural distribution agency typically caters to fewer customers than urban agencies.
  • Implementation of direct benefit transfer schemes must be made more robust. Effective monitoring and grievance redressal systems are equally important to ensure that problems in the scheme are highlighted and addressed early.
  • The scheme should be accompanied by a focussed public relations campaign to build awareness and create a demand pull, not only for clean cooking but also for good service.
  • Ensuring reliable supply is also likely to require strengthening the refining, bottling and pipeline infrastructure.
  1. Widen the net:

The PMUY targets only BPL households. But, there is a need to widen the net for two reasons: one, because of known inclusion and exclusion errors in BPL lists, and two, because BPL may be a narrow definition of deprivation and many non-BPL households may also not be able to afford LPG connections.

  • The wider net could just be all rural households or all households except those meeting well-defined exclusion criteria such as ownership of certain categories of assets.

Conclusion:

The PMUY is a bold and much-needed initiative, but it should be recognised that this is just a first step. The real test of the PMUY and its successor programmes will be in how they translate the provision of connections to sustained use of LPG or other clean fuels such as electricity or biogas. Truly smokeless kitchens can be realized only if the government follows up with measures that go beyond connections to actual usage of LPG. This may require concerted efforts cutting across Ministries beyond petroleum and natural gas and including those of health, rural development and women and child welfare.