Glass Half Full
“Each year, close to 4 million people die prematurely from illness attributable to household air pollution from inefficient cooking practices using polluting stoves paired with solid fuels and kerosene.”-WHO Report
On 1st May 2016, Prime Minister, Narendra Modi launched Ujjwala scheme. Ujjwala scheme intends to improve life of rural women by providing them LPG connections. In June 2016, baring seven states, less than 50% rural population has active gas connection1. Hence most of households are using firewood, biomass, and cow dung as source of fuel energy.
Pre-launch Status:
Most of rural households are using multiple sources of fuels for cooking purpose. As many of households have free supply of cow dung, bio fuel from agriculture waste and availability free fire-woods. It is note-worthy that these free supplies are not sufficient for overall demand of cooking fuels, hence household have regular expense towards cooking fuels.
Figure 1: Major Cooking Fuels1
Overall, rural households partly purchase cooking fuel and partly utilize free resources. In initial phase Ujjwala scheme should aim to be substitute paid cooking fuels.
Total Expense on cooking fuels
Figure-2 Total expenses on cooking fuels/month by households versus income levels1
As above figure depicts, average expense on cooking fuels across various income range. It is note-worthy that even for lowest income group, average expense in INR 334 per month on cooking fuel.
On an average Indian household uses nearly 7.2 cylinder per year, since each cylinder cost nearly INR 500 after subsidy. Monthly cost of LPG would be INR 300, which even lower than average household cooking gas expense of income below INR 2250. Despite being cost efficient, LPG gas usage has/had many barriers such as High initial cost, tedius application process, long waiting period to get the refill.
Figure-3 Barriers to LPG Connections1
As above figure depicts, major barrier is high initial cost, long time waiting time for connection and tepid process of application. It is also note-worthy that 83% respondent thinks, that LPG has high recurring cost. As discussed earlier, LPG is more cost efficient but household can purchase traditional fuel at for daily use INR 10 but they have shell out INR 500 for LPG refill (14.2 KG). Hence, household perceive LPG as high recurring cost.
Scheme Introduction
Against this back drop Ujjwala scheme was launched. Under this scheme, a new LPG connection issued in name of women household and government will pay INR 1600 for connection and user has to pay for stove, which can be paid in EMIs. More importantly, scheme tries reduce - long waiting time for LPG connection, making process of application smooth, increase awareness about LPG usage. Beneficiaries covered are Below Poverty Line, All SC/STs households beneficiaries of Pradhan Mantri Awas Yojana(PMAY) (Gramin), Antyoday Anna Yojana (AAY), Forest dwellers, Most Backward Classes (MBC), Tea & Ex-Tea Garden Tribes, People residing in Islands and People residing in river islands.
Though, there have been a number of previous schemes similar to Ujjwala, but key difference in government intent. For example, Government has pledged nearly INR 12,800 Cr from government funds tries to reach nearly 8 Cr rural household. It is note-worthy that previous scheme Rajiv Gandhi Gramin Vitaran Yojana was originally to increase number distributor in the country, later it offered one time financial benefit to new user. The financial benefits were provided by CSR budget of OMCs, which would a mere fraction of Ujjwala budget. Even if, Ujjwala is not an eureka moment, coverage in certainly multifold of previous schemes.
Scheme Progress till Date
As per official government figure- 5,41,22,556 connections under Ujjwala and across 715 districts.
Figure-4 LPG Connections under PMUY5
The scheme has high penetration in UP, Bihar, West Bengal, Madhya Pradesh, Rajasthan, Odisha. As shown in figure below, these states had below 50% penetration as on June 2015 (3).
Figure-5 LPG coverage1
As far as penetration as concerned, scheme has been effective as it has remove critical barriers towards LPG usage like upfront cost, waiting time for connection, awareness about the usage.
OMCs are responsible to cross-check de-duplication as government will refund INR 1600 only for first time connection. OMCs have also needs to insure that beneficiary has Jan-Dhan account and valid aadhar card. These reduces chance of misuse of scheme.
Consumption:
By own admission by government, consumption of LPG by PMUY beneficiaries is --close 4 per year against national average of 7-8 cylinder per year.
As discussed earlier, most of rural India has some free supply of cooking fuels. Expecting complete shift from free-cooking fuel to LPG would be a bit unrealistic given just 2 year to scheme.
Having said that, Government must look beyond numbers, should take complementary step to increase LPG connection.
Shreerupa, expert on UN, WTO, oil and energy wrote -“Behaviour change involves the one-time, unfamiliar dot behaviour (new LPG purchase), short-term unfamiliar span (new behaviour during first few weeks/ months of LPG usage) and long-term familiar path behaviour (effortful span behaviour turning into the spontaneous habit over time). Each of this requires different types of intervention — the Ujjwala scheme is primarily tackling the first type of behaviour.”
“Studies across Asia, Africa and Latin America have shown that in rural, poor communities with access to free fuel (wood, dung, crop residues), the transition to commercial fuels is neither fast nor easy. The cook needs to change the style of cooking, the household head needs to readjust family budget priorities to pay for an LPG cylinder and the family has to adjust to real/ perceived changes in taste and texture of the cooked food.”3
Government has initiated PM LPG Panchayat, which is a community meeting which will serve as a platform for LPG consumers to interact with each other, promote mutual learning and sharing of experiences. Through, this initiative government looks to build social infrastructure for Ujjwala scheme.
Give It Up Campaign:
More than 10 million Indian households have given up their subsidy. It has been a great initiative to channelizing government subsidy, which is used to fund Ujjwala scheme. Even by conservative estimates - 10 million household will fore-gone nearly INR 1250 Cr subsidy yearly. (Assuming 250 subsidy for 5 cylinder per year)
“The technological approach to this campaign is what makes it more accessible and appealing to its urban consumer base, and on the rural front, the campaign is expanding LPG consumer base by allocating a subsidised connection to a rural household for every subsidy that is given up. This provides rural households with the opportunity to switch to cleaner and safer fuel”4
For counter view - Glass Half Empty
References
Assessment report: Primary survey on household cooking fuel usage and willingness to convert to LPG – By Crisil
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