Modi launches LPG scheme for poor women

Ujjwala Yojana scheme partially funded from the savings.

Updated - October 18, 2016 02:54 pm IST

Published - May 01, 2016 05:06 pm IST - Ballia (UP)

Prime Minister Narendra Modi addresses during a launch of "Pradhan Mantri Ujjwala Yojana" in Ballia on Sunday.

Prime Minister Narendra Modi addresses during a launch of "Pradhan Mantri Ujjwala Yojana" in Ballia on Sunday.

Prime Minister Narendra Modi on Sunday launched the Pradhan Mantri Ujjwala Yojana, which aims to provide five crore LPG connections to women in Below Poverty Line (BPL) households over the next three financial years, at a cost of Rs. 8,000 crore.

The scheme, launched at Ballia in Uttar Pradesh, is to be partially funded from the savings accruing to the government from LPG users who gave up their subsidy as part of the Give It Up programme.

“Over one crore consumers have given up their subsidy, leading to savings of nearly Rs. 2,000 crore per year. This money would be utilised to provide LPG connections to BPL families,” Mr. Modi said at the launch function.

Finance Minister Arun Jaitley had, in his Budget speech in February, announced a provision of Rs. 2,000 crore this financial year to provide LPG connections to 1.5 crore women from BPL households.

The new users who receive LPG connections under the scheme will not have to pay the security deposit, while the Rs. 1,600 administrative costs, cost of pressure regulator booklet and safety hose will be borne by the government.

Consumers will have the option to purchase gas stove and refills on EMI.

Expansion plans

The Prime Minister said nearly 10,000 new distributorships and infrastructure expansion plans were in the works to cater to the increased demand arising out of the new connections.

The households will be selected using the socio-economic and caste census data.

Currently, India has 16.64 crore active LPG consumers with a requirement of about 21 million tonnes per annum.

Stating that LPG coverage is being increased, he said there are serious health hazards associated with cooking based on fossil fuels.

According to World Health Organisation estimates, about 5 lakh deaths occur in India alone due to unclean cooking fuels. Experts say having an open fire in the kitchen is like burning 400 cigarettes an hour.

Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country and this will empower women and protect their health, he said.

Demand for LPG to double

India’s demand for LPG is expected to see a double-digit growth over the coming years, the government said in a release. Towards this, several steps have been taken to increase infrastructure in order to meet the demand.

“The three public sector oil marketing companies have approved plans to expand rated LPG bottling capacity from the present over 15,000 thousand metric tonne per annum [TMTPA] by around 10 per cent by the end of FY 17-18, so as to meet the expected increase in LPG demand,” the release said. Several steps are being taken to expand import facilities as well.

“While Indian Oil is developing new import facilities at Dahej [by 2018-19], Paradip and Cochin [by 2017-18], Bharat Petroleum is developing its import facility at Haldia, apart from which East India Petroleum Private Limited [EIPL] capacity augmentation is also getting completed by December 2016,” the release said, adding that the private sector was also working towards adding import infrastructure.

Apart from those who voluntarily gave up their LPG connections, those earning Rs. 10 lakh or more a year have been deemed ineligible for the subsidy.

The recently-released income tax data shows that there were 13.3 lakh individuals who declared an income above Rs. 10 lakh a year in assessment year 2012-13. Using that number, back-of-the-envelope calculations show removing the LPG subsidy from these people would save the government Rs. 173 crore a year.

(With agency inputs)

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