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Achieving Universal LPG Coverage? Tracking the Progress of Ujjwala under Modi Government

By Nitin Mehta & Pranav Gupta

Pradhan Mantri Ujjwala Yojana (PMUY) is one of the flagship programmes of the Modi government. The scheme was launched in May 2016, with the aim of providing 5 crore LPG connections to BPL families over the next three years. This article focuses on the progress made by the government in the implementation of Ujjwala, and existing gaps in this scheme which may need government attention

Achieving Universal LPG Coverage? Tracking the Progress of Ujjwala under Modi Government

Why is Ujjwala Important?

Millions of households across the country still rely on fuels like Kerosene, firewood, coal, cow dung cakes etc. for coking. Due to various reasons, the government's decision to shift households towards LPG is an important decision.

First, LPG is a cleaner fuel as compared to these alternatives and the shift could help in reducing carbon emissions. Second, indoor pollution caused is a major cause for respiratory diseases among women and children. Using some of these traditional fuels in the kitchen generates smoke equivalent to approximately 400 cigarettes.

The WHO estimates that close to 5 lakh women die every year due to health impact of unclean fuels. Thus, expanding LPG coverage can help immensely in improving the health of women across the country. Also, under the programme, the connections are given out under the name of females. The transfer of subsidy amount to their accounts could help in financial empowerment of women.

How has been the Progress on Ujjwala?

Exactly one year into its launch, the scheme has already covered 694 districts in the country. More than 2.2 crore connections have been released so far. There has been a ten percentage point rise in LPG coverage in the country in the last one year.

Now, more than 7 out of 10 households in the country have an LPG connection. In 2016-17, 3.25 crore new LPG connections (includes both Ujjwala and Non-Ujjwala LPG connections) were registered across the country. This is single highest annual increase in LPG connections ever.

Progress on the Ujjwala Yojana, up till now, has been better than the government's own targets. Not only this, it is also likely to be better than the performance of the UPA government's Rajiv Gandhi Gramin LPG Vitran Yojana (RGGLPY).

Maintaining fiscal discipline

Funding for the RGGLPY essentially came from CSR funds of the Oil Marketing Companies. On the other hand, a sum of 8000 crores has been allocated for the implementation of the Ujjwala Yojana.

This may not lead to a major strain on the exchequer too as the government has managed to save immensely through the 'Give it Up' Campaign and the 'Pahal' programme for Direct Transfer of LPG Subsidies.

Across the country, 1.05 crore LPG consumers have heeded to the government's call and voluntarily gave up LPG subsidy under the Give It UP campaign. DBT for LPG has led to plugging of leakages and reduced the subsidy burden of the government.

The Road Ahead

Progress on the Ujjwala in its first financial year has been extremely encouraging. But, the government must be cautious towards maintaining this momentum. As coverage of government programmes expands, enrolment of new beneficiaries becomes relatively more difficult.

The real success of Ujjwala Yojana essentially hinges on whether the new connection holders continue to use LPG. We must remember that many low income households preferred to use traditional fuels despite LPG availability. This may have been due to the former being much cheaper than the latter.

The government will have to ensure that LPG remains affordable for the masses. Also, the DBT provisions make the success of the programme dependent on the how the Pahal programme works.

For instance, households may drop out of if they are unable to withdraw the subsidy amount from the accounts. Ensuring that the inter linkages also function smoothly is necessary for long term success of Ujjwala. There is little doubt that the Ujjwala Yojana, if implemented properly, could transform lives of low income households.

(Nitin Mehta is Managing partner, Ranniti Consulting and Research. Pranav Gupta is an independent researcher.)

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