The PMUY has helped a large number of rural households shift to cleaner LPG fuel for cooking. However, data indicates that sustaining the use of LPG among the beneficiaries remains a challenge. In 2021-22, two crore customers under the PMUY took one or no refill. The average refills in 2020-21 increased because of the PMGKP which has now decreased in 2021-22.
The Pradhan Mantri Ujjwala Yojana or PMUY is a flagship scheme of the government aimed at encouraging the use of clean cooking fuel (LPG) for domestic purpose concomitantly trying to safeguard the health of women and children, by preventing chest congestion related diseases. Financial assistance is provided to encourage people to take up new LPG connections which is released in the name of the adult woman of the beneficiary’s family. The scheme was launched on 1 May 2016 in Uttar Pradesh. Even the World Health Organization (WHO) appreciated the scheme for being a ‘decisive intervention to check the indoor health pollution being faced by the women of the country’.
However, sustaining the use of LPG by the beneficiary families in the absence of a major subsidy or a limited subsidy of Rs. 200 per cylinder, remains a challenge. In this story, we look at the cylinder refill data under PMUY to understand the trends.
PMUY was extended in 2021 and again in 2022
Initially, the scheme was formulated to benefit only certain groups as per the Socio-Economic Caste Census exclusion criteria and was later expanded to include all those belonging to the Below Poverty Line. Under Phase I of the scheme, an annual target of 2 crore beneficiaries was set by the government for each of the three financial years from 2016-17 to 2018-19. However, in this period, over 7.18 crore connections were released which is 1.18 crore connections more than the target. Later, the target was set to provide 8 crore connections by 2020 which was achieved by September 2019. In 2021, Phase-II of the scheme was launched to release 1 crore deposit free LPG connection on pan India basis, in addition to the 8 crore LPG connections already released under Phase-I of PMUY. Again, in 2022, the Government extended the Scheme to release additional 60 lakh LPG connections under PMUY 2.0 on existing modalities.
30% of the LPG connections in India are under PMUY
As on 04 July 2022, according to the PMUY website, a total of 9.34 crore connections have been released under PMUY since inception, including 1.35 crore connections released under PMUY 2.0. Further, the LPG coverage in the country has improved from 62% on 01 May 2016 to 99.8% as on 01 April 2021. As on 01 July 2022, there were 30.95 crore Domestic LPG connections in India. In other words, LPG connections issued under PMUY accounted for 30% of the total connections in the country.
Sustained use of LPG cylinders by beneficiaries remains a challenge
While the increase in coverage and number of connections is a step forward, the scheme can be said to be effective only if the beneficiaries continue to use LPG. The indicator to monitor this progress is tracking the number of refills under the scheme and the trend in average refills. This becomes critical in the light of steep hike in the LPG prices and the government’s subsidy limited to Rs. 200 per cylinder for PMUY beneficiaries.
The price of a 14.2kg Domestic LPG Cylinder (Retail Selling Price at Delhi) has increased from Rs. 650.5 as on 01 May 2018 to Rs. 1053 as on 06 July 2022. That is, in around four years, the price of the regular domestic cylinder has increased by nearly 62%. Since the scheme caters to only those persons who belong to the Below Poverty Line, the affordability of cylinders may dissuade people from consuming LPG refills.
According to the data on the average number of refills under PMUY at the national level based on Parliament responses and CAG Report, there is a consistent decline in the average refills between 2016-17 to 2019-20, from almost 4 to nearly 3. However, in 2020-21, there was a sudden increase in refills under PMUY, with the average refills crossing 4 refills for the first time. In 2021-22, in the period from April 2021 to February 2022 for which data is available, the average refills stand at 3.66 cylinders, with one month left for the financial year to end.
Average increased in 2020-21 because of PMGKP
The sudden increase in the average refills in 2020-21 can be attributed to the government’s scheme that provided up to 3 LPG Cylinder refills free of cost to PMUY beneficiaries in the light of the COVID-19 pandemic. This announcement was made under the Pradhan Mantri Garib Kalyan Package (PMGKP) to ameliorate the hardships faced by the poor due to economic disruption caused by the pandemic. The scheme was initially made effective for a period of 3 months starting April 2020, and was later extended till the end of September 2020, and then to 31 December 2020 for those beneficiaries who had been credited with the advance for buying refill but could not buy the refill.
Over 14.17 crore free refills were provided under the scheme to PMUY beneficiaries across the country. The majority of these refills were provided in Uttar Pradesh (2.7 crores), followed by West Bengal (1.73 crores), and Bihar (1.54 crore). More than one crore refills each were provided in Madhya Pradesh and Rajasthan. These five states together accounted for 58% of the free refills provided under PMGKY in 2020-21. These five states also accounted for 58% of the beneficiaries under both phases of PMUY as on 01 July 2022. If the free refills under the PMGKP are excluded, then the average number of refills in 2020-21 goes below 3.
Most states recorded a drop in average refills except in 2020-21
To analyse the trends in the average number of refills consumed across states, those states with at least one lakh LPG connections under PMUY have been considered. The states have been categorized into three based on the number of connections. These are- states with more than 50 lakh connections, those with 10 to 50 lakh connections, and those with 1 lakh to 10 lakh connections.
Like the national trend, the average cylinder refills peaked in 2020-21 and dropped in 2021-22 in all the states except Delhi.
Among the states with more than 50 lakh connections under PMUY, all six states saw a decline in the average number of refills between 2016-17 and 2018-19. Except for Bihar and Odisha, the remaining states witnessed a marginal increase in refills in 2019-20.
Similar trends were observed in Assam, Chhattisgarh, and Gujarat, which had 10 to 50 lakh connections. Of the remaining states in the category, Punjab and Tamil Nadu saw an increase in average refills up to 2018-19 followed by a drop in 2019-20. The average refills in Karnataka were less than 2 in 2016-17 which jumped to 4 in the following year.
Of the states with less than 10 lakh connections, Haryana saw an overall decline in refills from 6.7 in 2016-17 to 5.34 in 2021-22. In Delhi, there was a drastic increase in refills from 6.6 in 2017-18 to 12 in 2018-19, which dropped to 7.9 in 2019-20. In 2021-22, the average refills in Delhi was 6.2. In both Delhi & Haryana, the average refill number is significantly high than in other states.
About 2 crore beneficiaries in 2021-22 took one or no refill
According to a response in the Rajya Sabha to a question on the total number of beneficiaries of PMUY who took one or no refills in the last five years, 1.65 crore customers in 2017-18, 4.14 crore in 2018-19, 3.24 crore in 2019-20, 0.77 crore in 2020-21, and 2 crore customers in 2021-22 took one or no refill. That is, they either did not take a refill at all or took only one refill (including the installation refill). A total of 2 crore PMUY customers out of the total 9.34 crore PMUY customers in 2021-22 accounts for 21.4% of the customers taking one or no refill. The response also stated that during 2021- 22, out of the total domestic active customers of 30.53 crores, 2.11 crore domestic LPG customers had not taken any refill while 2.91 crores domestic LPG customers had taken only one refill. That is, a total of 5.02 crore customers took either no or one refill.
CAG report, 2019 noted that annual refill consumption for PMUY beneficiaries was low compared to non-PMUY consumers
The issue of sustained use of LPG cylinders under the scheme has been highlighted previously by multiple studies and reports. A CAG report from 2019 noted that the average annual refill consumption for PMUY beneficiaries has remained low (roughly half) as compared to non-PMUY consumers. The report also noted that there was a delay in the installation of new connections under the scheme. Further, it found that 14 lakh beneficiaries consumed 3 to 41 cylinders in one month. Nearly two lakh beneficiaries had an annual consumption of more than 12 cylinders. These point toward the risk of domestic cylinders being diverted for commercial purposes. Unsafe practices by beneficiaries such as placing stoves near the cylinder on the ground were also observed by CAG.
Another survey conducted by the Research Institute for Compassionate Economics in 2018 found that despite having LPG connections, about 78% of the respondents in Rajasthan, Uttar Pradesh, Bihar, and Madhya Pradesh used traditional wood chulhas (stoves) for cooking. These are also those states with a higher number of beneficiaries under PMUY.
Ecowrap noted that increasing prices will result in people going back to using unclean fuels for cooking
SBI’s research report, Ecowrap, published in February 2020 stated that “PMUY has solved the problem of availability, but the affordability barrier still exists.” As per their analysis, 54.2% of total PMUY consumers consumed up to 3 cylinders in a year or more while a family of 4 requires at least 3-4 cylinders per year. It noted that PMUY use among the rural households in states with low per capita income may be lower due to continuous increases in LPG prices and that the beneficiaries go back to using unclean fuels for cooking.
Gains made with PMUY stand threatened with an increase in prices
The PMUY has resulted in a large number of rural households shifting to use cleaner LPG fuel for cooking. However, these gains stand threatened in the light of the steep increase in LPG prices and the limited government subsidy of Rs. 200 per cylinder. Data also indicates that after the free cylinder intervention under the PMGKP increased the average refills in 2020-21, the average decreased in 2021-22.
Featured Image: PM Ujjwala LPG Cylinder Refills