Ujjwala – Quantitative Success, Qualitative Work in Progress

The Pradhan Mantri Ujjwala Yojana (PMUY) is over 3 years old. The scheme, started on May 1, 2016, aimed to provide free LPG connections to households living below the poverty line. The intention was to wipe out indoor air pollution caused by the solid and liquid fuel guzzling chulhas and replace it with the relatively clean gas connections. In August 2018, the ruling dispensation handed over the 50 millionth Ujjwala connection inside the parliament and as of the date of writing this article, over 74.7 million connections have been delivered across 715 districts in India. PMUY was also a major electoral plank in the recently concluded general elections and is counted amongst one of the big-ticket policies that helped the BJP ride back into power with an overwhelming majority. It was also recently hailed by the International Energy Association (IEA) as a major social, energy and economic achievement and multiple nations have approached India to help replicate the system in their own country.

The two primary drivers behind PMUY’s success has been the emphasis given to digital India and the strengthening of the channel of subsidy payment via direct benefit transfer (DBT) to the beneficiaries’ bank account. Any adult female member of a household which qualifies for Ujjwala Yojana, and having a bank account, can register for it by filling out a form which is available both online and at all LPG centres. Of the initial cost of around ₹3200 for a gas connection, the government will bear ₹1600 and the remaining ₹1600 can be availed as an interest-free loan from Oil Marketing Companies (OMC) if the person is unable to make up the money herself. Thus, for essentially zero upfront cost, a household can bring home an LPG connection under Ujjwala. As Ujjawla has to be registered in the name of a female of the household, it also acts as a form of empowerment.

In terms of sheer numbers, Ujjwala has been, and is, a shining success. The percentage of households with a cooking gas connection in 2015 stood at 55%, and today it stands at over 90%, an increase of over 63%. The government’s initial target of reaching 50 million households has been revised upwards to meet 80 million households by August 2019. The health benefits accrued from the implementation of this scheme would also be a feather in the cap for the government. Indoor air pollution, caused by using dirty fuels such as wood or cow dung for cooking, is the second biggest killer in India after high blood pressure. Around 2 people are killed due to it every minute in India, and accounts for over 124,000 premature deaths every year. Providing access to clean cooking gas would therefore be a great boost to the health of the average Indian citizen. A study by the Indian Chest Society and Indian Chest Research Foundation has found that female chest congestion in rural households reduced by as much as 20% since the rollout of PMUY.

Now that over 90% of the target households have been brought under the Ujjwala net, the government must now shift its focus to the services and qualitative aspect of Ujjwala. Several multiple gaping holes are present in the current form of the scheme, especially in last-mile implementation. The qualitative aspect can be measured by considering the extent of use of LPG connections in households, which can be indirectly measured by the frequency of refills demanded.

One of the most levelled criticisms against PMUY has been that it has failed in encouraging refills. As opposed to solid fuels, which are essentially free of cost to the consumer, an LPG refill requires an upfront payment and is only partially subsidised. A 14.2 kg cylinder costs around ₹700, of which around ₹200-300 will be paid back to the bank account of the beneficiary by DBT. Though the delay in receiving the subsidy is minimal, the initial high cost of refill is often a deterrent. Further, if the person has availed a loan via an OMC for the initial LPG connection, the loan amount is deducted from the subsidy per refill till the full loan is paid (i.e., for around six or seven refills, the beneficiary receives no subsidy and has to pay the full amount). People thus tend to minimise using LPG to prolong the life of the cylinder and hence put off the need for a refill. A single cylinder sometimes lasts as long as an entire year. If a customer account does not ask for a refill within 3 months, the OMC deems that account as inactive. India has almost 4 crore inactive LPG connections. Data shows that the average number of refills per year for connections taken under PMUY stands around 3, which is less than half of the national average of almost 7.

Another hurdle the government has to overcome is misinformation, false beliefs and superstition. A recent survey found that rural households, though aware that LPG is less polluting than traditional chulhas, consider food made on chulhas to be better tasting and healthier. Some also believe that consuming “food made over gas causes gas” and thus stomach pain. There are also some concerns among social analysts that shifting from solid fuels – which required women of the households to go out daily to collect the fuel – to cooking gas would curb freedom of the female, cut down on their opportunities to socialise with others and essentially restrict them to within the confines of the house. The logistics of a refill is also a challenge, both to the customer and the OMC. The OMCs will need to radically strengthen their supply chains to reach far-flung customers. The customer of the refill will also often have to arrange transport from the LPG centre to her household as delivering low volumes in sparsely populated areas is not feasible to the supplier.

Thus, the government needs to prioritise improving the existing Ujjwala infrastructure to better serve Indian needs. One solution to tackle the high costs, already partially in action, was to make it mandatory for OMCs to offer a smaller 5 kg LPG cylinder to the customer. As opposed to the 14.2-kg cylinder, the 5-kg cylinder costs only a third (around ₹250) and the subsidy amount received by DBT is also smaller (₹80), thereby not affecting the liquidity of the customer. The smaller cylinder also is much more portable, and thus logistics expenses are minimised. Providing this smaller cylinder facility to all families, while also strengthening a door-to-door refill channel, will make the entire process more economically and physically feasible. The government also needs to spend on information campaigns to dispels myths surrounding LPG and teach the population about the health hazards of indoor air pollution caused by using wooden stoves. Certain social reforms would also be necessary to smoothen this transition. Once all these are addressed, we will be able to celebrate the Pradhan Mantri Ujjwala Yojana as a robust example of how strong political will and concentrated efforts helped create a sea change and usher in a much cleaner and healthier India.

About Author

Athul Krishna A is an ardent fan of everything DC, everything fantasy and everything sci-fi. He is a regular
writer on a variety of topics at 2Sides. Currently pursing a MBA degree from XLRI Jamshedpur, he can be reached at athulkrishnaa@gmail.com

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