Making an Impact: Success of the PMUY in promoting LPG use

Success of the PMUY in promoting LPG use

With the aim of providing liquefied petroleum gas (LPG) connections to 80 million below poverty line (BPL) households, the central government launched the Pradhan Mantri Ujjwala Yojana (PMUY) in May 2016. The scheme, which is being implemented from 2016 to 2020,  gives financial support of Rs 1,600 for each LPG connection being provided to BPL households covered under the Socio-Economic Caste Census (SECC) 2011 database. This subsidy includes the cost of a cylinder, pressure regulator, booklet and safety hose. The total support being given under the scheme is to the tune of Rs 128 billion.

The LPG connections being released under the scheme are given in the name of the women of the BPL family. The identification of the eligible families is being made in consultation with the respective state governments and the union territories. For the scheme, a BPL family is defined as a person or household that suffers from at least one deprivation (such as houses with one or less room having kuccha walls and kuccha roof, no adult member in the household between age 18 and 59, scheduled caste/scheduled tribe households, etc. ) under the SECC 2011 database.

The need for the scheme

The reach of LPG cylinders in the country has been mostly in urban and semi-urban areas with a comparatively low penetration in rural areas. Most households in rural areas still rely on primitive cooking fuel such as cow dung and wood which pose a potential health hazard for the family, especially the women who spend a lot of time in the kitchen.

As per World Health Organization estimates, smoke inhaled by women from burning this unclean fuel is equivalent to burning 400 cigarettes in an hour. This causes health conditions such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer, which could be avoided if a clean cooking fuel is used. The PMUY provides LPG, a cleaner cooking fuel, as an alternative. This will help protect the health of household members, especially the women. Further, the scheme is also providing employment for rural youth by creating a supply chain for gas in areas that did not have access to LPG previously, thus reducing unemployment.

Under the scheme, a woman of a BPL household would need to submit an application for a new LPG connection in a prescribed format to the nearest LPG distributor. The woman also has to submit family details such as the full address, the Jandhan bank account number and Aadhaar card numbers of all the members of the household. The designated field officials would then match the application against the SECC 2011 database. After ascertaining the BPL status of the family, the details such as name, address, etc. would be entered into a dedicated web portal maintained by the public oil marketing companies (OMCs). After undertaking de-duplication and due diligence of such entries, the public OMC would issue the connection to the eligible beneficiaries.

PMUY – Progress and impact

Under Union Budget 2018, the ambit of the PMUY was expanded to include 80 million poor families, up from the initial 50 million. The financial support was also increased from Rs 80 billion to Rs 128 billion. This was done in response to the positive impact the scheme was seen to be having on the lives of women in rural areas.

As per a survey undertaken by financial consulting firm MicroSave across 12 districts of eastern, central and western Uttar Pradesh, women saved at least one-two hours every day by cooking on LPG gas stoves. This was mainly because cooking on these stoves was faster. They also saved time which was previously spent on the collection of firewood. The time thus saved was spent on leisure activities or other household pursuits. The use of LPG as an alternative fuel is also leading to an improvement in the health of the women in these areas.

The scheme has achieved significant progress in the past two years and more than 37.8 million LPG connections have been provided under the scheme across 712 districts  till May 4, 2018.

The scheme is also accelerating the rate of LPG consumption across the country. As per data from the Petroleum Planning and Analysis Cell, consumption of LPG increased from 21.61 million tonnes (mt) in 2016-17 to 23.34 mt in 2017-18, showing a year-on-year growth of 8 per cent. During the period, the northern region had the highest share in consumption at 31.4 per cent, followed by the southern region at 28.5 per cent. The western region accounted for almost 22.2 per cent while the eastern region and north-eastern region had a share of about 15.5 per cent and 2.4 per cent respectively. The eastern region, however, recorded the highest growth of 14.7 per cent in total LPG consumption during 2017-18. This is a clear indicator of increased penetration of LPG in the eastern region that was previously lacking LPG connections.

The number of registered LPG consumers of OMCs showed a significant increase from 237.1 million in April 2017 to 259.5 million in January 2018. This works out to almost 2.5 million new LPG connections being provided each month. The number of LPG distributors has also grown from 18,786 in April 2017 to 19,469 in January 2018.

The scheme has given a significant impetus to the LPG bottling plants of OMCs. As per reports, some OMCs are utilising about 120 per cent of their existing LPG bottling plant capacity to cater to the increased demand. Some of the plants are even resorting to night shifts after obtaining the requisite permissions from the Petroleum and Explosives Safety Organisation.

The PMUY is creating employment for about 100,000 people by creating a supply chain of LPG in areas that were previously not covered under the country’s LPG map. The scheme is promoting entrepreneurship by providing business opportunities worth at least

Rs 100 billion over the 2016-20 period. The Make in India initiative is also being given a push as the cylinders, gas stoves, regulators and gas pipes are manufactured domestically.

The way forward

The PMUY has seen significant impact across the country with rural women increasingly preferring LPG over traditional firewood or cow dung. As per the Ministry of Petroleum and Natural Gas , about 60 per cent of the 32 million women who were given free cooking gas connections till December 2017 had bought as many as four refills during the year showing the increased adoption of the fuel. However, there are areas such as tribal belts where women have gone back to the use of firewood after their first cylinder was exhausted. Thus, along with expanding the reach of LPG connections in the country, the scheme also needs to continue educating BPL families on the benefits associated with the long-term use of LPG. Overall, the scheme has created significant impact and is expected to offer increasing