Abstract
This article analyses the performance and limitations of the Pradhan Mantri Ujjwala Yojana (PMUY), a central scheme launched in the year 2016 for the provision of liquefied petroleum gas (LPG) connections to Below Poverty Line households in the country. It shows that the scheme offered more than 80 million LPG connections and contributed to a sharp replacement of traditional fuel (firewood, kerosene, dung cake, etc.) between the years 2014 and 2018. However, a large share of these new consumers appears to have stopped LPG consumption soon after the distribution under the scheme. This is clearly evident in the huge number of inactive LPG connections which continue to increase—from 35.8 million inactive connections in the country in 2017 to 43.2 million in 2019. Though PMUY contributed to the increase in LPG connections, it failed to accelerate its consumption demand among the beneficiaries. Nearly ₹128 billion has been spent by the government in form of subsidies and around 70% of the PMUY beneficiaries have availed loans from Oil Manufacturing Companies (OMCs). If the LPG consumption fails to accelerate, these one-time subsidies provided by the government will fail to achieve the objective and the loans disbursed by the OMCs may turn into non-performing assets.
Published Version
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