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Ujjawala Yojna - oil companies benefitted more than those deserve
Jamwal Mahadeep Singh8/8/2018 10:51:53 PM
Welfare schemes for vulnerable sections of the population loaded with vote bank politics always carry fewer merits and more demerits and the Pradhan Mantri Ujjwala Yojana to improve the life of women hailing from BPL household's well suits in this frame. We must accept finite disappointment, but never lose infinite hope - Martin Luther King, Jr. One should have a big enough heart to unconditionally accept follies, and a broad enough mind to embrace the goodies that may come from even the worst critics. But in actuality, we (especially politicians) never bow before the facts that good ideas when implemented on ground, without exploring pros and cons, the negativity thereof, we always suppress and keep our lies atop for self aggrandizement. Same is the case with much hyped 'Pradhan Mantri Ujjawala Yojna (PMUY)' a laudable but lacking certain requirement at the implementation level. The government launched the scheme in haste. The fact that the scheme would not meet its objectives would have been obvious to the government if it only it had waited for the results of a study it commissioned from the rating and analytics company CRISIL in 2015 to try to understand why users were not abandoning biomass fuels for cleaner LPG cylinders. Between October and December 2015, CRISIL surveyed more than one lakh people without gas connections across 120 districts in 13 states. The results were submitted to the government in June 2016, three months after the Union cabinet hastily approved the details of the scheme in March and a month after Modi formally launched the scheme. It is a beneficiary social welfare scheme introduced by the Narendra Modi Government on 1st May 2016, ahead of assembly polls, from Ballia in Uttar Pradesh. The scheme aimed to replacing the unclean cooking fuels mostly used in rural India with clean and more efficient LPG and aims to provide LPG connections to BPL households in the country. As a freelance writer, the postmortem of the scheme with 20/20 vision conducted and placed in the public domain for general awareness to understand it in a better way than lopsided story in circulation.
The Modi government is merely counting the number of new gas connections provided under Pradhan Mantri Ujjawala Yojna (PMUY) as only yardstick for celebrations without deep routing into the scheme. We can agree that number of connections provided to users under this scheme is enormous but at the same time we too has to admit that consumers of LPG cylinders under this scheme are declining day-to-day after first cylinder exhausts. Growth in the number of LPG customers was the highest in the past decade in 2016-17. PMUY is the reason for this. Out of 32.2 million new LPG connections in 2016-17, twenty million are PMUY beneficiaries. While the number of LPG connections across India has increased by an impressive 16.26% since the scheme was launched, the use of gas cylinders increased by only 9.83%. This is even lower than the rate recorded in 2014-15, when the scheme did not exist, according to data from the government's Petroleum Planning and Analysis Cell and other data accessed by scroll in. There is a huge mismatch in growth of LPG consumption and customers under this scheme. This difference between the increase in the number of connections and the sale of cylinders is a consequence of the fact that many people with new connections are not buying refilled cylinders after their first one runs out. The interesting factor here is that although government has provided a free empty cylinder to 20 million consumers under PMUY but the actual users of the LPG under the scheme are far less than those obtaining the LPG connections. However, statistics from the ministry of petroleum question the euphoria around PMUY. LPG connections have increased no doubt but PMUY beneficiaries do not seem to be using their LPG cylinders. India's poor are not using LPG cylinders they got under Ujjwala scheme. A large number of PMUY beneficiaries have not come back for refills in many states (Oil Minister has projected that as many as four LPG cylinders are bought by about 60 per cent of the 3.2 crore poor women who were given free cooking gas connection). The gap between consumption and customer growth for LPG in 2016-17 confirms the hype of Modi government created about PMUY customers but in actuality not buying refills. There is a huge mismatch in growth of LPG consumption and customers in 2016-17. We find that relatively poorer states such as Bihar, Uttar Pradesh and Madhya Pradesh are the ones with the highest mismatch between sales and customer growth between 2015-16 and 2016-17. A Comptroller and Auditor General's report notes that in 2015-16, households with LPG connections were using an average of 6.27 cylinders in a year. But after the scheme was launched, the number of cylinders used on average had come down to 5.6.
We have an interesting data as to understand why users' not abandoning biomass fuels for cleaner LPG cylinders. CRISIL (formerly Credit Rating Information Services of India Limited) is a global analytical company providing ratings, research, and risk and policy advisory services) that has surveyed more than one lakh people across 120 districts in 13 states prior to implementation of PMUY scheme and results were submitted to the government in June 2016, Meanwhile in a haste government without looking for pros and cons implemented the scheme as a political appeasement to the voters of UP, keeping in mind the elections in the state at door step. Many political analyst credit mass distribution of LPG connections under the scheme, for thumping victory of BJP in UP. The results of various surveys go as; 83% speaks of price of refills was too high, 88% speaks of high recurring monthly expenditure. By contrast, a subsidized LPG cylinder refill costs around Rs 500 and an average family uses around six a year. 72% voted for lack of distributors for the fuel in the local area, long waiting time to get a refill for an empty LPG cylinder as main impediments. Other reasons are; kerosene or firewood is a much cheaper cooking fuel. An average 35% of the households procure firewood for free, 76% got cow-dung cakes for free and 88% obtained other kinds of biomass for free even a subsidized cylinder costs around Rs 496.31 as on date. Paying for one LPG cylinder per month is not an insignificant expenditure for poor households in India.
Who is actual beneficiary then? The scheme provide only free connection and not supply, this doesn't ensure the continuation of use of LPG as many people are too poor to afford. But under the scheme, the government provides immediate a subsidy of Rs 1,600 to government-owned oil manufacturing companies for every free LPG gas connection that they install in poor rural households. This subsidy is intended to cover the security fee for the cylinder and the fitting charges. The target of the government to provide cylinders to 5 crore such household by the end of 2018-19, means an amount of Rs. 8000 crore to the oil companies and it is the tax payers money. The beneficiary has to buy her own cooking stove. To reduce the burden, the scheme allows beneficiaries to pay for the stove and the first refill in monthly installments. However, the cost of all subsequent refills has to be borne by the beneficiary household without any concessions from the second refill. Households though opt for subsidized connections but do not spend on refilling their cylinders as it is costly as compared to biomass thus it would be difficult to sustain it.
Concluding to make the scheme beneficial in real sense government has to concentrate on following suggestions: The cost of refilled cylinders would have to be further subsidized by the government. In addition, the infrastructure for delivering cylinders, dealers and distributors had to be enhanced substantially. This will provide an additional employment and provide business opportunity in businesses ranging from setting up of infrastructure to manufacture cylinders, gas stoves, regulators, and gas hose.
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