Fact Check: Is Ujjwala Yojana Really A “Roaring Success” As Claimed By The Govt?

On May 1, 2016, Prime Minister Narendra Modi launched the Pradhan Mantri Ujjwala Yojana (PMUY) in a bid to provide 5 crore free LPG connections to below-poverty-line families. The scheme provides a financial support of Rs 1,600 for each LPG connection to the BPL households.

Two years down the line, has PMUY really been able to achieve its initial target of freeing the women from poor households from the harmful and polluting methods of energy use?

Fewer beneficiaries go for refill

The scheme on paper is shown to be successful. As of now more than 4.4 crore LPG connections have been extended to BPL families. In an interview to Times Now earlier this year, PM Modi said that he “may even complete the target of 5 crore families before the 2019 deadline.”

While the number of free LPG connections extended to BPL families are on track but the grave question right now is whether new connections under PMUY are translating into consistent use given that the cost for the subsequent cylinders has to be borne by the BPL family itself?

According to the Rangarajan committee, those who live on income of less than Rs 32 a day in rural areas and Rs 47 a day in urban areas are considered to be a BPL family. This compared to the cost of a cylinder which is high even at a subsidized rate shows that with this kind of income, a BPL family will not be able to afford the market rate.

For Ujjwala beneficiaries, the upfront payment for LPG connections is waived off – they do not have to pay the security deposit or other overhead costs, however, there is no extra concession from the second refill stage. This means that they too have to purchase gas at the market rate – which they simply cannot afford.

The statistics also prove the same. Data shows that the year-on-year increase in the consumption of LPG has risen from 9% to 9.8% from 2015-16 to 2016-17 in comparison to the greater rise of customers in the same period from 10.2% to 16.2%. Thus, the number of ‘inactive’ users are on the rise.

Even the CRISIL study commissioned by the government in 2015 to understand why people were not adopting LPG cylinders over biomass fuels, revealed that after the high initial cost of connection (86.3%), the high recurring cost of LPG refill was the second biggest reason (83.4%)

This raises serious questions on the logic behind both the ‘Give It Up’ campaign and the Ujjwala Yojana. It also proves the point that number of new connections alone is not the yardstick against which the success of the scheme can be measured. For the success of any policy, it is important that it is affordable to those who are real beneficiaries. Those who are taking LPG free connections under Ujjwala Yojana are now not getting Kerosene under subsidised rate. It is a double whammy on the poor who are already reeling under heavy prices of LPG cylinder. We hope government take these factors into consideration and see that if any policy changes can be done to help the beneficiaries of Ujjwala Yojana.

Also read:

All You Need To Know About Pradhan Mantri Ujjwala Yojana

Price Of Subsidised LPG To Increase By Rs 4 Per Month Till The Subsidy Is ‘Nil’: Govt