Skip to main content
xYOU DESERVE INDEPENDENT, CRITICAL MEDIA. We want readers like you. Support independent critical media.

Reduction in Petro Products Subsidy is 92%, Hike in LPG Cylinder Prices is Double!

Ajay Kumar |
Translated by Aditi Nigam
With one hand the Modi government is offering 5kg free ration, with the other it is asking for Rs 900 for LPG cylinder, pushing women back to using firewood.

“When a woman from a poor household cooks food on a chulha, she inhales smoke equivalent to 400 cigarettes. I have seen this in my childhood. Sometimes, my mother used to cook food and her face could not be seen due to the smoke.” These are words spoken by Prime Minister Narendra Modi during one of his election speeches, while highlighting the benefits of the Ujwala scheme (providing free LPG connection to below poverty line women).

One should now ask the Prime Minister what he has to say about cooking gas being sold at than Rs 900-1,000 per cylinder in several regions of the country. Will any poor mother be able to pay such a huge price?

Supporters of Modi and his government may give the argument of subsidy for LPG. That is, if the prices increase, then its burden will not be allowed to fall on the common people, and that the government itself will send money to the account.

Technically, the subsidy is not over. But realistically, the subsidy on LPG has gone. As per government norms, apart from those with an income above Rs 10 lakh and those who wish to voluntarily give up the subsidy, LPG subsidy will be available for all.

LPG gas prices

Illustration by Kaveri Pain

According the Controller General of Accounts (CGA),  the subsidy on petroleum products plunged 92% in April-July 2021 from a year ago. This was because the government withheld the transfer of subsidies on liquefied petroleum gas (LPG) cylinders to millions of beneficiaries despite a sharp increase in the prices of the cooking fuel, says a report in MoneyControl.

“In fact, petroleum subsidy for the first four months of 2021-22 was estimated at Rs 1,233 crore provisionally, down from Rs 16,461 crore in the corresponding period of 2020-21 when poor households were given three free refills, says the report.

The report says that cash transfer of LPG subsidies into bank accounts of beneficiaries was stopped in May 2020 when petroleum prices fell to multi-year lows. The prices of non-subsidised LPG cylinders fell to the level of subsidised ones, erasing the need for subsidies.

So, on the one hand, the price of LPG was being increased from Rs 25-50 every month while on the other hand, the cash transfer to the poor as subsidy was stopped. Last year the price of LPG was around Rs 580 and this year its price has increased from Rs 900 -1,000 per cylinder.

According to the Pradhan Mantri Ujjwala Yojana, women living below poverty line (BPL) will be given free gas cylinders and will be given the facility to refill gas cylinders at subsidised rates thrice. The government had claimed that due to this scheme, gas cylinders were reaching 95% of the people of India and a large population of India, especiallt women, had been freed from the compulsion to cook food using wood collected forests.

The moot question is: If the price of LPG has doubled in the past seven years, then how many women and families have actually benefited from this scheme?

According to a 2018 survey by the Research Institute of Compassionate Economics, in four states of North India, 85% women who took the benefits of this scheme have quit the scheme and cook on earthen stoves. A report by the Comptroller and Auditor General (CAG) for the year 2019 says that the families benefiting from the Ujjwala scheme hardly use three or four cylinders in a year.

It may be noted that goods and services tax (GST) is applicable on cooking gas. However, as in petrol and diesel, there is a cap on increasing GST on LPG, too. Which makes one wonder: is the government adopting a non-subsidised policy in this case so that it can save itself from getting burdened in any way?

The Prime Minister Ujjwala Yojana is one of the most widely publicised schemes. The Bharatiya Janata Party-led government has been using this scheme to tom-tom its “achievements” in the field of “development.” From the Prime Minister to BJP Chief Ministers, all can be seen patting their backs on this scheme in the media, in advertisements and commercials. But, there is hardly any coverage of  the manner in which this scheme is being implemented, and where its beneficiaries stand today.

Ahead of the Assembly elections next year, especially in Uttar Pradesh, the entire media is engaged in the work of communal polarisation riding on the back of Taliban taking over in Afghanistan. This at a time when inflation is increasing, unemployment is increasing. After the pandemic, more than seven crore people have gone below the poverty line. India's economy is grappling with lack of demand. People do not have money in their pockets to face the high inflation.

These days, maize is being harvested in rural areas of Bihar. Women go to the fields to collect the stalks so that these can be used for cooking on the earthen stove – the same one which the Prime Minister said was akin to inhaling smoke equivalent to 400 cigarettes!

(Translated and edited from the original article in Hindi)

Get the latest reports & analysis with people's perspective on Protests, movements & deep analytical videos, discussions of the current affairs in your Telegram app. Subscribe to NewsClick's Telegram channel & get Real-Time updates on stories, as they get published on our website.

Subscribe Newsclick On Telegram