Ujjwala 2.0 target saturated as connection requests top 10 million

Oil Ministry will get approvals to go beyond Budgeted target

The Ministry of Petroleum and Natural Gas has got more than 10 million valid applications under the second leg of the Pradhan Mantri Ujjwala Yojana (PMUY 2.0). With this, the target for disbursing 10 million new connections in the Budget 2021 has been saturated.

“We will seek post-facto approvals for disbursing connections in excess of the target spelled out in the Budget 2021. No connections will be denied to eligible beneficiaries of PMUY 2.0,” an oil ministry official told Business Standard.

In her Budget 2021 speech, Finance Minister Nirmala Sitharaman had said, “Ujjwala Scheme which has benefited 80 million households will be extended to cover 10 million more beneficiaries.”

PMUY 2.0 was launched with the objective of disbursing connections to the remaining targeted beneficiaries. A focus of the exercise is to give connections to migrant families that find it harder to furnish proof of address documents.

To make this leg of the program even more affordable, the first LPG cylinder refill and hotplate (amounting to around Rs 1,800 for both) is free under PMUY 2.0. This is in addition to the Rs 1,600 upfront amount that is waived for PMUY 2.0 beneficiaries.

The Ministry of Petroleum and Natural Gas had introduced PMUY as a flagship scheme with an objective to make Liquefied Petroleum Gas (LPG) available to the rural and deprived households. The targeted homes of lower income families were otherwise using traditional cooking fuels such as firewood, coal, and cow-dung cakes among others. The scheme was launched on May 1, 2016 in Ballia, Uttar Pradesh by Prime Minister, Narendra Modi.
 

Since these connections were targeted for lower income households, they were offered without an upfront cost being borne by the beneficiary. This amount was instead loaned by oil companies who then recovered it from the subsidy which was accrued on subsequent LPG refills that beneficiaries bought at full price. Sensing that PMUY beneficiaries were unable to bear the cost of LPG cylinders at full price, the government decided that oil companies should forego the recovery of these interest free loans.

The target to release 80 million deposit free LPG connections to the deprived households was achieved on September 7, 2019 when Modi handed over the 80 millionth LPG connection in Aurangabad, Maharashtra. According to official data, over 83 million connections have been disbursed under the first phase of PMUY till date.

This led to an increase in India’s LPG coverage from 62 per cent on May 1, 2016 to 99.8 per cent as on April 1, 2021. The remaining gaps are expected to be filled with PMUY 2.0. As on September 15, the highest number of PMUY 2.0 connections have been disbursed in Bihar (605,000). West Bengal (334,000) comes second while Gujarat (281,000) comes third.

It is expected that there will be a little over 300 million LPG consumers in India by March 2022. Of these, there will be around 207.2 million non-PMUY (or regular) LPG consumers in the country.