Flickering Prospects for Ujjwala Scheme

The Consumer resistance building up against cooking gas in the wake of an exorbitant rise in price of refills is proving to be the undoing of the Pradhan Mantri Ujjwala Yojana (PMUY) launched with a big bang in 2016.

Several reports, including the one from the Comptroller and Auditor General of India (CAG) suggest that households from the underprivileged sections, who were provided the cylinders under the scheme by the Ministry of Petroleum and Natural Gas for women from Below Poverty Line (BPL) families, have not proceeded beyond a second or third refill.

The PMUY was launched on May 1, 2016 in Ballia in Uttar Pradesh. It aimed at releasing 8 crore LPG connections to deprived households by March 2020. The target was enhanced by one crore with additional allocation made in the 2021-22 Union Budget. These additional numbers were to be provided to migrant families.

Recent surveys and studies show that despite vast expansion of the scheme, LPG refills ordered by consumers have been constantly declining since 2018. Reports from the Ministry itself had shown that of the 3.18 crore PMUY consumers who had an LPG connection for one year or more as on December 31, 2018, 17.4% never ordered a second refill and 33.15% ordered only one to three refills per year. The resistance is attributed to the constantly rising prices of refill cylinders.

A survey of the 1,660 beneficiaries conducted between April 2016 and December 2018 had pointed out that 35.44% consumers had reverted to traditional fuels mainly due to higher prices of LPG refills in the first year of the scheme itself. Most of them went back to fossil fuels such as firewood, biomass, coal or kerosene, all of which are termed ‘unclean’ besides proving hazardous for the health of the household. It is therefore not difficult to conclude that intended benefits of the scheme have eluded both, the environment and deprived families.

Increase of the price of refills has defeated the very purpose for which the scheme was launched with great fanfare. Other studies have also shown that more than half the beneficiaries who joined the network, ordered between one to three refills in a year, which is less than the national average of 3.21 refills.

Not this alone, the reports state that the dormant cylinders have been diverted for commercial services. While the coverage of the LPG scheme grew exponentially between 2016 and 2018 from 62% to 94% of the BPL families, the figures pertaining to refills paint a sorry picture. Decline in refills reflects absence of enthusiasm for sustained usage, mainly because of the frequent hikes in refilling charges. It is not difficult to conclude that the Union Government’s enthusiasm was highly misplaced.

There are limitations when it comes to implementing a populist scheme based on a commodity that has to be imported and prices are subject to fluctuating global supplies and currencies. Moreover, the tendency of the Union Government to treat petrol, diesel and LPG as cash cow shas only proved to be its nemesis.