Economy

PMUY cooking gas scheme needs a facelift, says study

Richa Mishra New Delhi | Updated on May 26, 2020

Another milestone PMUY has achieved the initial target of providing 5-crore LPG connections to BPL households

Differential subsidy, predictable income flows suggested to increase usage of LPG in rural areas

One of the government’s more successful schemes — the Pradhan Mantri Ujjwala Yojana (PMUY) — needs a facelift.

According to a paper published in the journal Nature Energy recently, there is a need to move beyond just cooking fuel policies and connect them to the broader rural development policies to improve clean cooking energy access.

The paper ‘The drivers of sustained use of liquefied petroleum gas (LPG) in India’ states that PMUY households need targeted support and nudges to have increased LPG usage.

“Differential subsidy support that increases the subsidy amount per refill for PMUY households can be a good starting point,” said Sunil Mani, Programme Associate at the Council on Energy, Environment and Water (CEEW), and one of the authors of the paper, adding that it may not be enough.

“But, we also argue that differentiated subsidy support might not be sufficient, as there are various other barriers like irregular income (from agricultural and labour activities) and ease of biomass availability that prevent sustained LPG use. Hence, we also propose other solutions like ensuring predictable cash inflow — such that it can be aligned with recurring refill payments for LPG — and creating opportunity cost for households to sell freely available biomass (for commercial purposes), to facilitate greater use of modern cooking fuels,” he told BusinessLine.

Mani , along with co-authors Abhishek Jain, Saurabh Tripathi and Carlos F Gould, used panel data collected from the rural areas of six major energy access-deprived States in India in 2014–2015 and 2018 for this paper, where they assess the determinants of upward shifts in LPG use after its adoption.

While PMUY households receive the connection either at subsidised rates or no upfront cost at all, the decision and effort to procure an LPG connection by general customers (non-PMUY households) means greater preparedness (behaviourally and financially) to use LPG as their primary fuel for cooking.

“This could be the reason for PMUY households’ lower likelihood of using LPG for primary and exclusive cooking needs than general customers, even after controlling for socio-economic differences,” he said.

According to Mani, the support could be in the form of higher subsidy amount for PMUY households. Some non-PMUY households might also require greater support, which can be identified once support for PMUY households is ensured first.

Positive association between village-level penetration of LPG as a primary fuel and its sustained use suggest that policies with community-level targeting could effectively increase LPG use, the paper argues.

“This means that LPG promotion policies aimed at improving availability and more decentralised awareness campaigns (in the form of LPG Panchayats) in low LPG-using regions could enhance LPG-use.,” Mani said.

On easy access to available biomass, he said, “We find that households which have easy availability of biomass and dung cakes have lower likelihood of using LPG for all their cooking needs. Here we recommend that creating opportunity cost for households to sell the biomass for commercial purposes — such as alternative transport or industrial fuel — could create an opportunity cost for biomass to facilitate greater use of modern cooking fuels.”

As regards reliance on uncertain and irregular income source, the paper said, “Households relying on agriculture and labour as the primary source of income need livelihood support that enables predictable and regular cash flow to facilitate sustained use of clean cooking fuels. Convergence across government schemes on rural livelihoods and employment guarantees with clean cooking fuel promotion could become an important driver of the transition away from polluting solid fuels.”

Published on May 26, 2020

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