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Business News/ News / India/  With Ujjwala, more LPG access but limited usage

With Ujjwala, more LPG access but limited usage

The BJP’s flagship PMUY scheme has increased the number of gas connections
  • The lack of consistent LPG usage in rural India, however, remains a concern
  •  (Reuters)Premium

    MUMBAI : In India, cooking, a very basic activity for human sustenance, can be fraught with danger. In 2016, the Institute for Health Metrics and Evaluation estimated that nearly 800,000 Indians lost their lives prematurely because of hazardous fuels such as wood and coal used in cooking. For more than 40 years, the Indian government’s main response has been to encourage the use of liquefied petroleum gas (LPG), a healthier but more expensive fuel, through a significant subsidy. To this subsidy, in 2016, the Bharatiya Janata Party-led NDA added a new initiative—the Pradhan Mantri Ujjwala Yojana (PMUY), which provides a free LPG connection to poor households.

    In terms of scale, PMUY is only a small proportion of the overall LPG subsidy. Last year’s budget (2017-18) set aside 2,252 crore for PMUY—around 14% of the overall LPG subsidy. But PMUY’s innovation lies in its scope and ambition. The scheme, often hailed as the flagship policy of the National Democratic Alliance (NDA) government, targets women who bear the brunt of the damage from hazardous fuels, and promises universal LPG coverage by 2020. The NDA has complemented these efforts with the Pahal scheme, a revamped version of the previous United Progressive Alliance (UPA) government’s direct benefit transfer of LPG (DBTL) to reduce subsidy leakage, and a ‘GiveItUp’ campaign urging the well-off to give up their LPG subsidies.

    Specifically, PMUY seeks to deliver 80 million new connections and bring clean cooking fuels to India’s homes, especially those in rural areas. At the time of PMUY’s launch, only 44% of Indian households and just 24% of rural households used clean fuels (LPG, electricity or biogas) in their cooking, according to the National Family Health Survey-4.

    There were also significant disparities in access across the country with households in poorer states more exposed to hazardous cooking fuels. For instance, less than 20% of households in Bihar and Jharkhand used clean fuels, compared to more than 65% of households in Tamil Nadu and Punjab (charts 1a and 1b).

    There are several reasons why these households resort to hazardous fuels but the most important is price. LPG cylinders, even after subsidies, can be prohibitively costly for the poor. In addition, many households may simply be unaware about LPG’s benefits; others may not know where to get a cylinder. PMUY tries to address all these barriers. Poor households, defined using the Socio-Economic Caste Census 2011, are provided free LPG connections (one cylinder per household) to overcome the initial cost barrier. In parallel, the government has expanded the distribution network of LPG dealers and rolled out awareness campaigns exhorting the benefits of LPG usage. In terms of access to LPG, official data suggests that these initiatives have worked.

    The oil ministry’s Petroleum Planning and Analysis Cell (PPAC) estimates that LPG coverage in India (the proportion of households with an LPG connection) has increased from 56% in 2015 to 90% in 2019.

    And of the 79 million poor customers with LPG connections, 76% are PMUY beneficiaries. According to these estimates, several states such as Maharashtra and Rajasthan, are already nearing 100% LPG coverage. The distribution network has also expanded significantly with nearly 9,000 new distributors added over the last five years, according to PPAC data (charts 2a and 2b).

    However, these figures can be misleading. In a 2018 Economic and Political Weekly paper, Ashwini Dabadge and others point to the PPAC’s use of population projections to estimate the current number of households as problematic and suggest that 100% coverage could simply mean that LPG is being diverted for other purposes. They also highlight issues in identifying poor households eligible for the scheme and suggest that oil marketing companies have diluted the beneficiary identification process to meet aggressive targets.

    But even with these caveats, external data reveals PMUY removing barriers and improving poor households’ access to LPG.

    For instance, in the ACCESS survey of over 9,000 households in rural Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Uttar Pradesh and West Bengal, Abhishek Jain and others of the Council of Energy, Electricity and Water find 43% of all the new LPG connections in the six states (between 2015 and 2018) came through PMUY.

    Equity of access has also improved. In the six states, more scheduled caste households (45% in 2018 from 12% in 2015) and more scheduled tribe households (32% from 8%) had access to LPG (charts 3a and 3b). More LPG connections though are only the first step to healthier cooking. To reap LPG’s health benefits, households still need to use LPG as their primary cooking fuel - and that remains an enduring challenge in rural India and for PMUY. The ACCESS survey shows that of the households who use LPG as a primary fuel, only 24% are PMUY beneficiaries. Similarly, an earlier survey from MicroSave, a consultancy, revealed that in Chhattisgarh, Madhya Pradesh and Uttar Pradesh, 81% of surveyed PMUY beneficiaries still use solid fuel for cooking a meal a day and only 16% had shifted to LPG completely.

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    The biggest reason for the lack of sustained LPG use is the cost of refills. In the ACCESS survey, almost all (92%) the rural households who do not use LPG as the primary fuel were constrained by the cost of recurring refills. Rural households also have the alternative option of readily available, free biomass which makes LPG less attractive—especially when distributors are distant and there is limited home delivery of cylinders in rural areas.

    Another factor could be intra-household decision-making in rural India. While PMUY was designed to empower women by providing the connection in the women’s name, refill decisions are still predominantly made by men.

    For instance, the ACCESS survey found that within households with LPG, more than two-third reported that a male member of the household decided when to order a refill.

    Sustained LPG usage will depend on tackling these barriers which PMUY, despite bringing LPG to more rural poor households, is yet to do. For the next government seeking to resolve India’s cooking-induced health crisis, this will be the challenge.

    This is the sixth of a 12-part report card series on NDA-II.

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    Published: 26 Mar 2019, 09:20 AM IST
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