Make cooking gas cheaper for poor, remove subsidy for rich: Study

15/08/2019

new delhi: The subsidy on liquefied petroleum gas (cooking gas) cylinders for India's newly-connected 73 million poor households should be increased enough to limit the cost of a cylinder to 4% of a household’s monthly expenditure, according to a study.
The subsidy should only be provided to poor households, and the wealthy should be removed from the beneficiaries list, according to the June 15, 2019, policy brief titled “Ujjwala 2.0” by Collaborative Clean Air Policy Centre (CCAPC), a multi-organisational initiative.
With these two changes the central government’s Ujjwala scheme can help poor families make cooking gas their primary cooking fuel, and not burn firewood and cow dung, the easily available biomass fuels, the policy brief stated.
By distributing 73 million connections (as on July 14, 2019), the Ujjwala scheme has met 91.25% of its target of 80 million connections to poor households by 2020. This is a 35-percentage-point rise since 2014. However, despite the soaring consumer numbers, cooking gas consumption rose by just 0.8% over two years to 2017, and the number of customers increased by 6%, IndiaSpend reported on April 22, 2019. Beneficiaries under the Ujjwala scheme have only bought 3.4 refills per capita annually, according to government data. For these households to completely switch to cooking gas, at least nine cylinders are required per year, according to the CCAPC brief.
Ujjwala beneficiaries have not switched completely to cooking gas because the refills are expensive. Around 85% of Ujjwala beneficiaries in rural Bihar, Rajasthan, Uttar Pradesh and Madhya Pradesh--where two-fifths of India’s rural population lives--still use solid fuels, IndiaSpend reported on April 30, 2019. This is due to gaps in the Ujjwala scheme itself. The CCAPC brief suggested plugging these gaps with increased subsidies to poor households, and better targeting of subsidies.
Strengthening the Ujjwala scheme is also important to mitigate the health burden of India. Burning firewood, dung and agricultural residue for cooking and other household uses accounts for 25-30% of exposure to outdoor particulate matter (PM) pollution in the country. Each year, around 480,000 Indians die prematurely due to direct exposure to household air pollution, and another 270,000 succumb to indirect exposure outdoors, the policy brief stated.
Using cooking gas can help prevent such deaths, as well as reduce government expenditure on treating ailments that result from exposure to biomass fumes.
With each cooking gas cylinder distributed, the government can save between Rs 3,800 and Rs 18,000 on health expenditure. When cooking gas usage mitigates the household biomass burning completely, 58% of the country’s 597 districts will breathe safer air, the brief said.
Budget for cooking gas subsidies grew by 63% in 2019-20
The initial goal of the Ujjwala scheme launched in 2016 was to target 50 million poor households, of 87.3 million identified by the Socio Economic and Caste Census 2011 (SECC).
In February 2018, this target was revised to target most of the 80 million poor households by 2020. The scheme was also expanded to cover all scheduled caste/scheduled tribe households, beneficiaries of Pradhan Mantri Awas Yojana (Gramin) (PMAYG), Antyoday Anna Yojana (AAY), forest dwellers, most backward classes (MBC), tea and ex-tea garden tribes, people residing on islands, etc. in addition to the SECC list.
In the 2019-20 budget, the government is estimated to spend Rs 32,989 crore on cooking gas subsidy, which is 63% higher than the revised estimates of 2018-19, according to IndiaSpend’s analysis.

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