Ujjwala LPG scheme crosses 7 cr customers

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The government’s ‘free LPG connection’ scheme, Ujjwala scheme has crossed the 7 crore-target, making it one of the most successful programs of the current government.

The scheme launched on May 1, 2016 with a target of providing LPG connections to 5 crore low-income households, and achieved the target in a record of time of 28 months.

The government revised the target to 8 crores last year with a budgetary allocation of Rs 12,800 crore.

The Ujjwala Yojana waives off the initial ‘administration fees’ of Rs 1,600 charged by state-owned oil companies if the recipient is recognized as living ‘below poverty line’ according to government records.

The scheme is aimed at expanding access to cooking gas to those who could not afford the start-up costs.

Contrary to its name, the ‘free LPG scheme’ does not provide free LPG.

The recipient also has to buy a stove at his own expense, though other equipment — such as the gas regulator and a rubber pipe — come free with the connection. The connection comes with one free cylinder.

Monthly refills are charged at the rate fixed for all domestic customers — which is around Rs 900 per refill.

However, customers can also buy smaller cylinders if they don’t have Rs 900 to pay at one go. There have been reports that many customers under the scheme did not go for follow-up refills, after installing the connection, as they could not afford to pay Rs 900 for the refill.

The move to allow smaller, 5-kg cylinders that cost only around Rs 330, was meant to alleviate this difficulty.

Oil companies have been aggressive in extending the benefit of the scheme, funded by proceeds from the ‘Give it Up’ campaign that urged well-off LPG customers to give up their subsidy.

Even otherwise, the government provides a subsidy of around Rs 200 per cylinder to all domestic customers, up to a maximum of 12 times per year.

It is not clear whether the number of new gas connections given by oil companies has increased significantly since the launch of the scheme — as was intended — or whether people living below the poverty line who would otherwise have taken gas connections under the regular scheme switched to Ujjwala Yojana this year.

Over a fifth of India’s population is classified as living below the poverty line.

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