PM Modi to launch Rs 8,000 crore scheme for free LPG connections to poor

The scheme will be launched using the money saved from 1.13 crore cooking gas users voluntarily giving up their subsidies

Prime Minister Narendra Modi will on May 1 launch an ambitious Rs 8,000 crore scheme to provide 5 crore free LPG connections to BPL families using the money saved from 1.13 crore cooking gas users voluntarily giving up their subsidies.

Modi will launch the Pradhan Mantri Ujjwala Yojana at Ballia in Uttar Pradesh on May 1 and do a repeat function at Dahod in Gujarat on May 15.

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Though the 'Give-it-Up' campaign seeking the well-heeled to voluntarily surrender cooking gas subsidies for one year was launched in January, 2015, Modi on March 27 last year officially launched the programme.

"Since the launch, 1.13 crore people have given-up LPG subsidies and are buying cooking gas at market price," Oil Minister Dharmendra Pradhan told reporters here.

Maharashtra tops the list with 16.44 lakh consumers giving up subsidies. Uttar Pradesh saw nearly 13 lakh users give up subsidies, followed by Delhi (7.26 lakh). Prime Minister's home state of Gujarat was way down the list with just 4.2 lakh giving up subsidies. Pradhan's home state of Odisha was even lower at 1.3 lakh.

"Five states of Maharashtra, Uttar Pradesh, Delhi, Karnataka and Tamil Nadu account for roughly half of the people who have given up LPG subsidies," Pradhan said.

Consumers are currently entitled to 12 cylinders of 14.2 kg each or 34 bottles of 5 kg each in a year at subsidised rates. A subsidised 14.2-kg cylinder is currently available at Rs 419.13 per bottle in Delhi while the 5-kg pack costs Rs 155.

Market-priced LPG is available at Rs 509.50 per 14.2-kg cylinder. Giving up subsidised LPG will help cut the government's subsidy bill, which was at Rs 30,000 crore on the fuel last fiscal.

Nearly Rs 5,000 crore of subsidy saved through the campaign is being used to provide LPG connection to the poor. "We have released 60 lakh new connection to poor in the last one year," he said.

Modi, Pradhan said, will on May 1 launch the Pradhan Mantri Ujjwala Yojana for providing providing free LPG connections to women from BPL households.

"Under the scheme, Rs 8,000 crore has been earmarked for providing 5 crore LPG connections to BPL households," he said, adding that in the first year 1.5 crore connections will be provided.

The scheme provides a financial support of Rs 1,600 for each LPG connection to the BPL households. The identification of eligible BPL families will be made in consultation with the State Governments and the Union Territories, he said.
Pradhan said the country currently has 16.64 crore active LPG consumers.

Of the 21 million tonne LPG requirement, nearly 40% is imported and this will go up as demand rises by double digit with new connections.

"We expect import ratio will rise to 50-55%," he said.

Those who have decided to give up their subsidies have to buy the product at the market price.

The surrendered subsidy is used by the government to provide cooking gas connection to the poor in rural households free of cost, the official said.

On March 27, Modi had officially launched the 'Give-it-Up' campaign, urging the well-off to surrender their LPG subsidy so that it can be targeted for the needy. The aim is also to bring down the country's dependence on energy imports by 10% by 2022.

LPG subsidy is transfered to beneficiaries directly in their bank accounts in advance.

Consumers can opt out of the subsidy by submitting written request to the distributor or electronically at mylpg.In.

Pradhan said with LPG coverage being predominantly in the urban and semi-urban areas, there are serious health hazards associated with cooking based on fossil fuels.

According to WHO estimates, about 5 lakh deaths 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. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas," he said.

Finance Minister Arun Jaitley had in his Budget for 2016-17 provided Rs 2000 crore to provide deposit free LPG connections to 1.5 crore women belonging to the Below Poverty Line (BPL) families.

Further, the Budget announced that the Scheme will be continued for two more years to cover 5 crore households.