I welcome you all to the curtain raiser to the WLPGA 2017 Asia LPG summit in New Delhi that will take place tomorrow and day after. We have the privilege and honor to host this event in India this year.
Friends, this is a very busy time in Delhi. We just had our Union Budget presentation last week. This is an annual event where the Hon’ble Finance minister presents the statement of account of revenue and expenditure, as well as announces important policy decisions of the Government before the Parliament of India.
We are also having elections to five legislative assemblies to elect provincial governments in five Indian States. These things will keep all of us, including the friends from media very busy for the next two months.
Friends, in a democracy, we have to give accounts to people of what we promised and what we delivered. As you are aware, we are exactly in the middle of our term. In May 2014, people of India gave a historic mandate to Hon’ble Prime Minister Narendra Modi for good governance and reforms. We are at the mid-way mark and it is really a time for us to see what we have achieved and what further needs to be done.
When we assumed charge, we realized that access to energy in an area where India needs to catch up – both in terms of access to electricity and access to clean cooking fuel. Hon’ble finance Minister announced in his budget speech that India is going to achieve 100% village electrification by 2018.
Other area where we needed to improve was access to clean cooking fuel. When we assumed office, we had a system of misdirected subsidies, rich and upper middle class were entitled to LPG subsidies. There were many duplicate connections and the subsidized LPG was diverted to commercial and industrial segments. As a result poorest of the poor never had access to LPG. In 2014, almost half of Indian households didn’t have LPG connections. We took it as a challenge and decide to change the LPG landscape in India
First we launched PAHAL that means Direct benefit transfer of LPG subsidy directly inot the bank accounts of the beneficiaries. This made the process transparent and plugged the subsidy leakages which was otherwise being misused through ghost accounts.
The success of PAHAL is evident from the fact it made it to the Guinness Book of World Records as the World’s Largest cash benefit transfer scheme. The scheme is benefitting over 176 million consumers and over Rs. 40,000 crore or USD 6.5 billion of subsidy has been transferred directly to the beneficiaries bank accounts in the last two years. It has also resulted in estimated saving of over Rs. 21,000 crore or USD 3.2 billion in two years to the government.
An intensive exercise was also carried out for identifying duplicate/ fake/ ghost / inactive domestic LPG connections and as on 1 April 2015, 33.4 million connections were identified. Using PAHAL, we blocked these connections and saved INR 210 billion subsidy in 2014-15 and 2015-16. Commercial LPG sales increased by 40% in period April 2015 – March 2016 in contrast to pre-PAHAL when these sales were not growing at all, showing how the subsidized residential supply was earlier diverted to commercial.
We also launched “Give it up” and “Give back” – this is a voluntary scheme where affluent consumers who could afford to buy LPG at the Market price, were encouraged to give up their entitlement to subsidy, so that the same could be used to provide more connections to poorest of poor. With an appeal of Hon’ble Prime Minister, Our Citizens have set high standards of voluntarism and participative democracy by giving up their LPG subsidy. Over 12 million consumers have given up their LPG subsidy which has helped in ensuring access to LPG connections to the under-privileged people.
Friends you will be surprised that amazingly, these are not only rich and upper middle class households but teachers, retired persons, government employees who have given up their LPG subsidy. I am very proud of these individuals who have voluntarily given up their subsidy and in many occasions we have publicly honored them to recognize their noble deed.
These households are now paying market linked prices of LPG. This has helped us provide subsidy to the needy. Nearly 6.3 million new LPG connections have been released to poor (BPL) families in 2015-16 linked to the Give it back campaign and utilizing Corporate Social Responsibility (CSR) funds of our oil Marketing companies (OMCs). Friends, globally many multilateral agencies like the World Bank have highly praised “Give it up” campaign, sighting it as finest example of voluntary citizen participation in governance process.
But our most ambitious scheme to ensure access of clean cooking fuel LPG to the poorest of the poors is the Pradhan Mantri Ujjwala Yojana.
Under Ujjwala programme which was launched in May 2016, We have set target to provide 50 million LPG connections over a period of three years for the poor households, with the budgetary support of Rs 8000 crore or USD 1.5 billion. It’s a matter of great happiness that the target of 15 million connections fixed for the current Financial Year 2016-17 has been achieved within a span of less than 8 months. Friends, most heartening this is that 37% of the beneficiaries belong marginalised communities. The PMUY scheme is bringing huge health benefits to poor households especially women by giving them access to smoke free clean cooking fuel. As on today, we have provided 16 million LPG connections under Ujjawala Scheme.
States with poor LPG access have benefited the most by this scheme. Top five states that have benefited as on December 2016, are Uttar Pradesh with 4.6 million connections, West Bengal with 1.9 million, Bihar with 1.9 million, Madhya Pradesh with 1.7 million and Rajasthan with 1.4 million. I am confident that we will exceed this target. We have already increased the national LPG coverage to 70% and we may even reach 85% in 2 years.
With the concerted efforts of the government, the LPG coverage in India has now increased to 72%. Our Government is striving to achieve universal LPG coverage in India. LPG expansion and penetration is ensuring right to access clean cooking fuel to every citizen of our country. I personally believe that providing access to clean cooking fuel to every household is not only our duty but it’s also a social obligation for all of us.
Couple of months back we had a LPG conference in Bhubaneshwar. It was an eye opener for us all participants in terms of the socioeconomic benefit of providing LPG in rural areas.
Like this conference, we had a range of speakers. UN Assistant Secretary General and Deputy Executive Director UN Women Mrs Lakshmi Puri mentioned how providing clean fuels like LPG impacts economic output. The time being spent by women on collection of firewood and cooking food using this firewood is instead used in productive economic activities and that has a huge positive impact on GDP.
Governor of Jharkhand, Hon’ble Droupadi Murmu mentioned her practical experience as a tribal villager without access to clean cooking fuel. She mentioned, in villages when the women folks go to forest for collection of firewood, how they are exposed to health and safety issues, even Sexual Harassment.
Doctor from AIIMS doctor mentioned how using chullah leads to inhaling of smoke which is equivalent to smoking 40 cigarettes a day. These create several health hazards: simple like headaches or nausea and severe like chronic bronchitis, nail diseases etc. This chullah smoke also leads to severe respiratory illnesses in children.
Hence, aim of our government is not only to improve access, but turn it into a social movement. The scheme improves health, safety and environment, which is the endeavor of our government and vision of our Hon’ble Prime Minister. In fact, I often mention that when I assumed office at the Ministry of Petroleum and Natural Gas, it was a ministry dealing with large corporates. We have turned this into a welfare ministry, touching lives of millions of poor and underprivileged.
Increasing access at such a fast pace comes with its own set of challenges. Challenges of reach, low consumer density, availability of distributors, rolling stock of cylinders etc. There are issues of Infrastructure – import facility, capacity of bottling plants and transport to inaccessible rural areas. However, our Oil Marketing Companies have done a commendable job – these companies geared up to plan and build this infrastructure and distribution network.
Friends, you would have heard about the bold reform move of de-monetizing higher currency notes in November 2016. This was a step taken to eliminate the parallel Economy, bring more individuals and companies into the tax net and overall reduce use of cash in the economy. Despite initial difficulties faced by general Population, this move has received massive public support.
Hon’ble Prime Minister has the vision to make our country a less cash using system. The enabler is the JAM trinity. J stands for Jan-dhan – these are banks accounts that were provided to the poor, who till recently were excluded from the financial system. More than 260 million bank accounts were opened under this scheme within six months of PM Modi coming to power.
A stands for AADHAR – which is a biometric identity card that has reached more than 99% of the more than 5 year old Population. And M is the mobile phone – which are more than a billion in India.
Going forward, using these three most of the digital transactions will take place and use of cash will be minimized. Our Oil Marketing Companies have started several mechanisms to make all transactions cash less. Customers can now book and make full payment for LPG cylinders online and even receive INR 5 discount per cylinder. So in the entire value chain of LPG, we would make use of digital Technology.
I am happy that during the next two days deliberations in the conference we will Share and hear from the distinguished guests about their experience in expanding LPG access and their success stories. There is a lot to learn from each other, particularly among Developing Countries.
India and its neighbouring countries Nepal, Bhutan, Bangladesh, Myanmar, Sri Lanka have the advantage of proximity to share infrastructure which will help us achieve economies of scale. I keep interacting with my colleague ministers in these countries in this regards.
I hope that this conference will provide a platform where we will exchange ideas to achieve collective victory over the ill-effects of smoke in our kitchens and bring better health for mothers and children.
If we can get our act together and provide 100% access to clean energy, we would impact 6 of the 8 millennium development goals: (1) eradicate extreme hunger and poverty by increasing economic potential of women & reducing Economic Loss due to bad health (2) empower our women (3) reduce child mortality (4) improve maternal health (5) ensure environmental sustainability and (6) combat tUberculosis.
I welcome you again to New Delhi. Please enjoy you stay here and I hope you have good deliberations & discussions over the next two days!