Ujjwala LPG subsidy may be extended | Mint
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Business News/ Economy / Ujjwala LPG subsidy may be extended
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Ujjwala LPG subsidy may be extended

It may also extend the Ujjwala scheme itself beyond March 2023 to take domestic cooking gas to uncovered areas in states and attain the goal of 100% LPG coverage.

As of 1 November, Meghalaya is the worst performer with only 54.9% LPG coverage followed by Tripura, Jharkhand and Gujarat, with 79.3%, 80.2% and 80.6% coverage.Premium
As of 1 November, Meghalaya is the worst performer with only 54.9% LPG coverage followed by Tripura, Jharkhand and Gujarat, with 79.3%, 80.2% and 80.6% coverage.

NEW DELHI : The union budget for FY24 is likely to extend the subsidy of 200 per cooking gas cylinder for 12 cylinders a year for another fiscal for Ujjwala beneficiaries, said two officials aware of the development.

It may also extend the Ujjwala scheme itself beyond March 2023 to take domestic cooking gas to uncovered areas in states and attain the goal of 100% LPG coverage.

In May 2021 in a bid to curb inflationary pressure amid high international gas prices, finance minister Nirmala Sitharaman announced a subsidy of 200 per cylinder for up to 12 cylinders for over 90 million beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) for the current fiscal (FY23) with an expected expenditure of 6,100 crore.

“The subsidy of 200 per cylinder is likely to be extended for one more fiscal. The scheme also will be continued as several states are yet to reach 100% LPG coverage," said one of the two officials.

The proposal comes as the government also plans to continue with the Ujjwala scheme, primarily aimed at promoting the use of LPG cylinders by supporting women in families below the poverty line with financial assistance of 1,600 for a new LPG connection along with the provisions of free first refill and free gas stove.

“The bottom line is that we want to strengthen the scheme especially in the north east," said the official. Queries sent to the ministry of petroleum and natural gas and the ministry of finance remained unanswered till presstime.

As of 1 November, Meghalaya is the worst performer with only 54.9% LPG coverage followed by Tripura, Jharkhand and Gujarat, with 79.3%, 80.2% and 80.6% coverage.

With these gaps in states, the extension of Ujjwala Yojana will ensure that free gas connection is provided to all areas in the country.

PMUY was launched on 1, 2016 and Ujjwala 2.0 was launched on 10 August, 2021 with an aim to reach the households missed out in the first phase.

Last week, union minister for petroleum and natural gas Hardeep Singh Puri told the Lok Sabha that the number LPG connections in the country have reached 325 million this year, out of which 96 million connections were provided under PMUY.

The move for extension of the subsidy to the weaker section of the society comes at a time when inflation is still elevated and the country is gearing up for the general elections in 2024.

Cooking gas prices have always been an area of concern for the common public in the country, thereby making it an major political issue. In the recently ended winter session of the parliament, leader of the Congress party in Lok Sabha, Adhir Ranjan Chaudhury also urged the government to reduce the prices of petrol and cooking gas in view of the impact on the common man.

State governments also provide support to LPG customers over and above the central government’s allocation. With assembly elections scheduled for next year, Rajasthan Chief Minister Ashok Gehlot has already announced that the state government will provide 12 cylinders for 500 to people from the economically weaker section registered under Ujjwala scheme.

The BJP government in Gujarat also, in October this year, announced distribute two free LPG cylinders every year to the beneficiaries of the Ujjwala scheme, ahead of assembly polls in the state.

On the fiscal front, the union cabinet in October approved a one-time payment of 22,000 crore to oil marketing companies (OMCs) to compensate them for their losses in selling cooking gas below cost.

In the supplementary demand for grants for FY23 approved by the parliament in its recently ended winter session, the government pegged the additional outgo for petroleum subsidy at 24,944 crore, above the budget allocation of 5,812 crore, mostly for payments to OMCs for domestic LPG operations and providing connections under PMUY.

 

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ABOUT THE AUTHOR
Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Published: 25 Dec 2022, 10:32 PM IST
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