Why the Centre’s claim of distributing 9.49 crore LPG connections is only half the story

The Bharatiya Janata Party, the largest party of India’s central coalition government, last week claimed that 9.49 crore LPG, or liquefied petroleum gas, connections had been distributed countrywide so far under the Pradhan Mantri Ujjwala Yojana, launched in May 2016. “PM Ujjwala Yojana is providing freedom from smoke to poor women,” the BJP’s tweet read in Hindi.

The Pradhan Mantri Ujjwala Yojana aims to combat the adverse health impacts of cooking with traditional solid fuels like cow dung cakes, by helping poorer households transition to gas, which is a cleaner energy source for cooking, while increasing energy security for these households.

Almost 9.5 crore gas connections have indeed been released under the Pradhan Mantri Ujjwala Yojana scheme as of September 1, data from the scheme’s official website shows. However, though gas cylinder adoption has surged since the scheme was launched, LPG was not being used consistently by a majority of beneficiary households due to the high cost of cylinder refills, studies have shown.

Experts say a faultily structured LPG subsidy system, under which the full cylinder price must be paid upfront and the subsidy is transferred later, is to blame. They also questioned the government’s methodology of calculating LPG connection coverage, given the use of outdated Census data. The government’s own health surveys show that more than half of rural India continues to rely on polluting solid fuels.

Even as adequate cylinder refills remained beyond the reach of most Pradhan Mantri Ujjwala Yojana beneficiary households, the central government’s fund allocation to and expenditure incurred on LPG subsidies has declined significantly, our analysis shows.

High price of gas cylinders

Of the 9.3 crore LPG connections provided under Pradhan Mantri Ujjwala Yojana by the end of financial year 2021-’22, 5.4 crore customers (60%) had taken four or fewer cylinder refills in the entire year, according to FactChecker’s analysis of responses given in the Lok Sabha by the Ministry of Petroleum and Natural Gas.

Around 1.08 crore (12%) took only one refill (including the installation refill provided by the government), and 0.92 crore (10%) did not take any refill at all, per a response by the Ministry of Petroleum and Natural Gas on August 1. The average number of 14.2 kg cylinder refills a year for Pradhan Mantri Ujjwala Yojana households was three in 2018-’19, and remained below four in 2021-’22.

A typical household using only LPG for cooking, whether in urban or rural India, would need at least seven cylinders a year to meet all its cooking energy needs, a 2020 study by the Council on Energy, Environment, and Water, a Delhi-based policy research non-profit, had found.

In its August 1 response, the Ministry of Petroleum and Natural Gas stated that “consumption of domestic LPG by households depends on several factors like food habits, household size, cooking habits, price, availability of alternate fuels etc”. But the high cost of gas cylinder refills is the biggest reason for low refills, experts told FactChecker.

When the Pradhan Mantri Ujjwala Yojana was launched in May 2016, the price of a standard non-subsidised 14.2 kg LPG cylinder in Delhi was Rs 527.5. This had doubled to Rs 1,053 by July 2022.

“Direct benefit transfer [DBT] rules require people to first refill their cylinders before receiving a subsidy. It is difficult for poor families to get the cylinder refilled from their own pocket and to wait for the subsidy amount in the future,” said Binit Das, Deputy Programme Manager for renewable energy at the Centre for Science and Environment, a New Delhi-based research and advocacy think tank. “It is better that the government spend the subsidy in advance than place the economic burden of clean fuel on the poor,” he added.

Declining subsidy expense

Even as the cost of cylinder refills remain beyond the reach of many Pradhan Mantri Ujjwala Yojana beneficiaries, there has been a significant reduction in the Union government’s LPG subsidy bill, beginning in the financial year 2020-’21.

While the government spent an average Rs 28,281 crore a year on LPG subsidies from the financial years 2017-’18 to 2019-’20, it had spent Rs 11,896 crore in the financial year 2020-’21, a 58% reduction, according to the data provided by the Ministry of Petroleum and Natural Gas.

Even the Rs 11,896 crore expenditure, however, was due to a limited provision of three free LPG cylinder refills to Pradhan Mantri Ujjwala Yojana beneficiaries as part of the Pradhan Mantri Garib Kalyan Yojana Covid-19 pandemic relief package, which cost the government Rs 8,162 crore.

The one-off nature of the Pradhan Mantri Garib Kalyan Yojana expenditure in the financial year 2020-’21 is highlighted in the government’s subsequent spending on overall LPG subsidy in the financial year 2021-’22, which decreased to Rs 242 crore, a 99% reduction compared to the average of the previous four years.

No subsidy has been paid on cooking gas since June 2020, Ministry of Petroleum and Natural Gas Secretary Pankaj Jain reportedly said in June 2022.

In the financial year 2023, the government will provide a targeted subsidy of Rs 200 per 14.2 kg cylinder for upto 12 refills a year, only to Pradhan Mantri Ujjwala Yojana beneficiaries, Finance Minister Nirmala Sitharaman announced in May 2022.

A provision of Rs 800 crore has been made towards Pradhan Mantri Ujjwala Yojana in the Union Budget 2022-’23, which is almost half the revised estimate of Rs 1,618 crore in the previous Budget 2021-22.

The full picture

Official estimates claim domestic LPG coverage has reached almost 100%, but Das told FactChecker that the calculation misses out certain key aspects.

“The estimate was calculated by dividing the total number of packaged LPG connections equally by the number of households in the country, but neither is the assumption that LPG connections are distributed equally among households accurate – because a large number of households use multiple LPG connections and many of them divert the gas to commercial use, and nor is the estimated number of households accurate,” said Das.

The number of households was extrapolated from India’s Census 2011 data, which experts have in the past told FactChecker are outdated and ineffective for assessing benefits-targeting policies. The Census 2021, delayed by the Covid-19 pandemic, is unlikely to be completed in 2022 either, IndiaSpend reported in June 2022.

Rural households

Almost three-fifths of India’s population – 58.6% – uses clean fuel including LPG/natural gas, biogas or electric sources for cooking, per data from the latest National Health and Family Survey-5, 2019–’21. This is a 15 percentage point increase from National Health and Family Survey-4 (2015–’16), but the disparity in clean fuel usage between urban and rural areas is stark. Nine out of every 10 urban households use clean fuel; but only four out of 10 rural households do so.

Thus, around 41% of all Indian households and 56% in rural areas still use some form of solid fuel such as wood, coal or dung cakes, for cooking. The central states of Jharkhand (67.8%) and Chhattisgarh (66.4%) have the most number of households still using solid fuel.

While Pradhan Mantri Ujjwala Yojana’s implementation has seen a surge in LPG adoption, consistent use of gas cylinders has been tepid, according to an 18-month study of 58 poorer rural households in South India by Boston College researchers, published in February 2022.

None of the surveyed households used LPG for more than 55% of their cooking time, the study found. A two-year Presidency University, Bengaluru-led study of cooking fuels used by 479 poorer households in three tribal-dominated Odisha districts, highlighted that less than half (43%) used LPG and only 26% used it as a primary cooking fuel.

An Indian household using only solid fuels for cooking has an average 24-hour concentration of fine particulate matter of 2.5 microns (PM2.5) – which cause cardiovascular and respiratory diseases, and cancers – of 450 micrograms per cubic metre air (μg/m3) in the kitchen and 113 μg/m3 in the living areas, a multi-national study had estimated in 2013. To put these numbers into perspective, the World Health Organization’s recommended safe limit for PM2.5 particulate exposure during a 24-hour period is 15 μg/m3.

FactChecker asked Pankaj Jain, Secretary Ministry of Petroleum and Natural Gas, and Rasaal Dwivedi, Principal Secretary to the Union Ministry of Petroleum and Natural Gas minister, via email and telephone for clarifications and comment on barriers, including cost, to consistent use of LPG cylinders by Pradhan Mantri Ujjwala Yojana beneficiaries in light of reduced subsidy allocations.

We also asked them about the contrast between government data claiming increased LPG connections and government surveys showing widespread use of solid fuel in rural India. At the time of publishing, we had not yet received a response from them. We will update the story when we receive a response.

This article first appeared on FactChecker.in, a fact-checking initiative, scrutinising for veracity and context statements made by individuals and organisations in public life.