26th December – Pradhan Mantri Ujjawala Yojana

The much hyped Pradhan Mantri Ujjawala Yojana was launched in May 2016. It promised to provide free cooking gas connections to 80 million poor families.

Basic issue –

Each BPL household would have to spend up to Rs.5,000 each year on LPG even at current subsidised prices — in addition to a one-time cost of Rs.1,800 for the connection — which may be unaffordable to many.

Issue of corruption –

  • Moreover, the Comptroller and Auditor General of India’s (CAG’s) report on PMUY points out major flaws in the implementation of the scheme which has already led to diversion of subsidies meant for beneficiaries and the mass diversion of LPG cylinders for commercial use and sale in the black market.
  • The audit revealed that in 3.44 lakh instances Indian Oil Corporation and Hindustan Petroleum Corporation issued two to 20 refills in a single day to beneficiaries “having a single cylinder connection.” Similarly, 13.96 lakh beneficiaries consumed three to 41 refills in a month.
  • A diversion of PMUY subsidies was also noticed. A test check of 164 LPG distributors by the auditors threw up several instances where subsidies meant for those enrolled under the PMUY scheme were being siphoned “thereby depriving the genuine beneficiaries of their subsidy.”

What needs to be done?

The distribution system needs to be strengthened to be able to meet the expected increase in demand, particularly in rural areas, as non-availability of fuel could push people back towards using solid fuels.

  • Ensuring reliable, sustained, last-mile supply would require multiple steps. It requires a large extension of distribution networks, especially in rural areas, since each rural distribution agency typically caters to fewer customers than urban agencies.
  • Implementation of direct benefit transfer schemes must be made more robust. Effective monitoring and grievance redressal systems are equally important to ensure that problems in the scheme are highlighted and addressed early.
  • The scheme should be accompanied by a focussed public relations campaign to build awareness and create a demand pull, not only for clean cooking but also for good service.
  • Ensuring reliable supply is also likely to require strengthening the refining, bottling and pipeline infrastructure.

Widening the net –

The PMUY targets only BPL households. But, there is a need to widen the net for two reasons: one, because of known inclusion and exclusion errors in BPL lists, and two, because BPL may be a narrow definition of deprivation and many non-BPL households may also not be able to afford LPG connections.

  • The wider net could just be all rural households or all households except those meeting well-defined exclusion criteria such as ownership of certain categories of assets.

SourceThe Hindu Business Line

QUESTIONThe flagship scheme of government of India, Pradhan Mantri Ujjawala Yojana which aims to provide affordable gas connections to women has run under the scanner for financial irregularities. Discuss the issue and suggest a way forward to improve governance of the scheme.

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