Direct Benefits Transfers

[op-ed snap] Next wave of reforms needed to achieve the objectives of Ujjwala

Note4Students

Mains Paper 2: Governance| Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of Pradhan Mantri Ujjwala Yojana (PMUY).

Mains level: The news-card analyses the success story of Pradhan Mantri Ujjwala Yojana (PMUY), in a brief manner.


Context

  • The astounding success of the Pradhan Mantri Ujjwala Yojana (PMUY) in distributing deposit-free LPG cylinder connections to women is the result of the political will and a well-meaning execution machinery.

Background

  • It is rare to find a scheme that has so successfully involved stakeholders down to the level of panchayats and had a perfect programme governance.
  • It is learnt that the minister of petroleum and natural gas, the secretaries in the ministries and the chairpersons and managing directors of oil marketing companies personally supervised the work.
  • They visited at least one district to understand the issues on the ground coming in the way and provided solutions.

Success of the scheme

  • The scheme took the household coverage from about 56% to about 81% in just three years.
  • That was unimaginable a few years ago when, even for an urban consumer, getting a cylinder was a wait in frustration.
  • Almost everyone in the beneficiary segment and the industry is complementing the doers most deservedly.
  • Despite being a social scheme, the delivery was cost-effective with numbers indicating about ₹1,600 spend per beneficiary.
  • The Ujjwala scheme was possible only because of the robust foundation created by the subsidy payment scheme, direct benefits transfer (DBT), which was another significant achievement of the government.
  • The government plans to cover more women with additional budgetary provisions made in the interim budget of 2019.

Objective of PMUY

  • The objective of the scheme was to make the rural households climb the energy ladder and stop using agro-waste as fuel at homes.
  • The argument was that women face a health hazard, spend time of the day collecting agro-waste fuel, and are unduly held responsible for collecting fuel when men arguably are earning bread.

Challenges: necessity for the next wave of reforms

  • However, the excellent delivery of the Ujjwala scheme is inadequate to achieve the objectives. The next wave of reforms is necessary.
  • Agro-waste usage cannot be done away with yet because of unaffordability and often non-availability of refill, though cylinders are already at home.
  • The subsidy against that refill is credited to their bank accounts with no delay.
  • However, many newly enrolled consumers do not have the capacity to make upfront payment for the refill.
  • Many micro issues lead to the consumers not updating their phone numbers and a vast majority of them, in turn, cannot order a refill with ease.
  • Delivering low volumes, especially in sparsely populated, hilly and far flung areas, is not feasible and costly.
  • Also, strengthening supply chain in new areas will take time.

Efficiency of the private sector will make PMUY sustainable

  • The public sector has the strength to make these social schemes succeed.
  • The efficiency of the private sector will make it sustainable.
  • The size of the sector and the growth it promises makes it imperative to assess the possibility of courageously unbundling, decentralizing, and democratizing activities.
  • The scope is in the whole value chain from sourcing infrastructure to storage and transportation, and from bottling to distribution.

Issues and possible Solutions

  • Aggregation of demand from low-demand areas using technology, servicing them by vehicles that also carry other goods, and using private sector services may be a solution.
  • Tech-enabled, Aadhaar-based micro-financing may help bridge the finance gap for refill purchase.
  • The possibility of avoiding full payment, as subsidy follows immediately, can be explored in case of digital payments as the payer’s credentials are established while paying.
  • Refill bookings need to become easy and quicker by making the interface simpler, including possibly by voice.
  • Start-ups and tech companies have a potential to demonstrate their prowess here.

Other issues being put across by social analysts

  • If women had the freedom to come out of homes and indulge in recreation while gathering agro-waste, how can we ensure they find other avenues of recreation instead of being restricted to their homes as they are in some sections of society.
  • Also, the argument is that men benefit as much as women, as the indoor combustion of agro-waste is a health hazard for them as well.
  • In most households the economic benefits of subsidy are accruing to the earning members i.e. the men.

Conclusion

  • For success of any scheme, social reforms are necessary too.
  •  The DBT and PMUY are all set to be followed by reforms which will be far reaching in meeting the objectives.
  • The success of PMUY is already a benchmark, with many countries reaching out to India to help them replicate it.
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