Modi to launch free LPG scheme as over 11 mn surrender connections

Prime Minister Narendra Modi will launch the ambitious Rs8,000-crore Pradhan Mantri Ujjwala Yojana on 1 May, after the government collected more than a fifth of the 50 million free LPG connections proposed to be given to poor families through the 'Give It Up' campaign.

With over 11 million LPG connections surrendered by well off consumers under the `Give-It-Up' campaign already in the government's kitty, Prime Minister Narendra Modi will launch the Rs8,000 crore scheme to provide 50 million free LPG connections to families in the below-poverty category.

Money saved from the 11.3 million cooking gas users who have voluntarily given up their subsidies, Modi will launch the Pradhan Mantri Ujjwala Yojana at Ballia in Uttar Pradesh on 1 May and at Dahod in Gujarat on 15 May.

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

"Since the launch, 11.3 million people have given up LPG subsidies and are buying cooking gas at market price," petroleum minister Dharmendra Pradhan said.

Maharashtra tops the list with 1.64 million consumers surrendering their subsidies, followed by Uttar Pradesh (1.3 million) and Delhi (7.26 lakh). Gujarat was with just 4.2 lakh giving up subsidies while 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 Rs419.13 per bottle in Delhi while the 5-kg pack costs Rs155.

"The campaign is for one year. Consumers will be free to change their mind. There will be no auto-renewal (of the subsidy surrender)," oil minister Dharmendra Pradhan said on Friday, when asked whether consumers can claim the subsidy in case prices spike and the gap between the subsidized and market prices widens in future.

A subsidized cylinder costs Rs 419.13 in Delhi, while a non-subsidized refill for domestic use costs Rs 509.50. Consumers are currently entitled to 12 subsidized cylinders of 14.2 kg each in a year.

Market-priced LPG is available at Rs509.50 per 14.2-kg cylinder. Giving up subsidised LPG will help cut the government's subsidy bill, which was at Rs30,000 crore on the fuel last fiscal.

Nearly Rs5,000 crore of subsidy saved through the campaign is being used to provide LPG connection to the poor.

"We have released 6 million new connection to poor in the last one year," he said. Modi, Pradhan said, will on 1 May launch the Pradhan Mantri Ujjwala Yojana for providing providing free LPG connections to women from BPL households.

"Under the scheme, Rs8,000 crore has been earmarked for providing 50 million LPG connections to BPL households," he said, adding that in the first year 15 million connections will be provided.

The scheme provides a financial support of Rs1,600 for each LPG connection to the BPL households. The identification of eligible BPL families will be made in consultation with the state governments and union territories, he said.

Pradhan said the country currently has 166.4 million active LPG consumers.

Of the 21 million tonne LPG requirement, nearly 40 per cent 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 per cent," 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 27 March, 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 per cent by 2022.

LPG subsidy is transferred 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 `'

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 five 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 2,000 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 50 million households.