Modi launches LPG scheme for poor women

Government has launched the Pradhan Mantri Ujjwala Yojana. The tagline for the scheme is Swachh Indhan, Behtar Jeevan.

About the Scheme

• It aims to provide five crore LPG connections to women in Below Poverty Line (BPL) households over the next three financial years, at a cost of Rs. 8,000 crore.
• Under PMUY, each of the beneficiaries will receive monetary support of about 1,600 rupees to get a connection of cooking gas. It includes administrative cost, pressure regulator booklet and safety hose.
• It is being implemented by Union Ministry of Petroleum and Natural Gas. It is for the first time this ministry is implementing a welfare scheme.

Funding of the Scheme

• The scheme is to be partially funded from the savings accruing to the government from LPG users who gave up their subsidy as part of the Give It Up programme.
• Apart from those who voluntarily gave up their LPG connections, those earning Rs. 10 lakh or more a year have been deemed ineligible for the subsidy.
• Removing the LPG subsidy from these people would save the government Rs. 173 crore a year.

Expansion plans

• Nearly 10,000 new distributorships and infrastructure expansion plans were in the works to cater to the increased demand arising out of the new connections.
• The households will be selected using the socio-economic and caste census data.
• Currently, India has 16.64 crore active LPG consumers with a requirement of about 21 million tonnes per annum.

Larger Objective of the Scheme

• As LPG coverage is being increased, there are serious health hazards associated with cooking based on fossil fuels.
• According to World Health Organisation estimates, about 5 lakh deaths occur in India alone due to unclean cooking fuels. Experts say having an open fire in the kitchen is like burning 400 cigarettes an hour.
• Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country and this will empower women and protect their health.

How to measure poverty

WHAT PANAGARIYA SUGGESTED

• Tendulkar committee's report should be accepted for poverty estimation for estimation of economic performance
• Socio-economic indicators should be used for determining the entitlement for benefits

Tendulkar Committee

• Tendulkar committee was based on calorie consumption(based on Alagh poverty line)
• It suggested that the expenditure required to meet this goal should be the poverty line for both rural and, of course, urban areas
• Tendulkar report shifted the emphasis from calories to food demand, but Alagh report focused on on foodgrains, with price elasticities calculated separately for the rich and the poor, leading to dual pricing
• Tendulkar committee report assumed that basic needs will be provided by the states (basic needs such as social services of health and education)

Previous committees:

Y K Alagh Committee

• Till 1979, the approach to estimate poverty was traditional i.e. lack of income.
• It was later decided to measure poverty precisely as starvation i.e. in terms of how much people eat.
• This approach was first of all adopted by the YK Alagh Committee's recommendation in 1979 whereby, the people consuming less than 2100 calories in the urban areas or less than 2400 calories in the rural areas are poor.
• The logic behind the discrimination between rural and urban areas was that the rural people do more physical work. Moreover, an implicit assumption was that the states would take care of the health and education of the people.
• Thus, YK Alagh eventually defined the first poverty line in India.

Lakdawala Formula

• Till as recently as 2011, the official poverty lines were based entirely on the recommendations of the Lakdawala Committee of 1993.
• This poverty line was set such that anyone above them would be able to afford 2400 and 2100 calories worth of consumption in rural and urban areas respectively in addition to clothing and shelter.
• These calorie consumptions were derived from YK Alagh committee only.
• According to the Lakdawala Committee, a poor is one who cannot meet these average energy requirements. However, Lakdawala formula was different in the following respects in comparison to the previous models:
• In the earlier estimates, both health and education were excluded because they were expected to be provided by the states. This committee defined poverty line on the basis of household per capita consumption expenditure. The committee used CPI-IL (Consumer Price Index for Industrial Laborers) and CPI- AL (Consumer Price Index for Agricultural Laborers) for estimation of the poverty line.
• The method of calculating poverty included first estimating the per capita household expenditure at which the average energy norm is met, and then, with that expenditure as the poverty line, defining as poor as all persons who live in households with per capita expenditures below the estimated value.
• The fallout of the Lakdawala formula was that number of people below the poverty line got almost double. The number of people below the poverty line was 16 per cent of the population in 1993-94. Under the Lakdawala calculation, it became 36.3 per cent.

Govt aims to remove poverty by 2032

Transforming India, an ambitious action plan finalised after two months of brainstorming shepherded by Prime Minister Narendra Modi, has recommended a slew of reforms to be implemented by ministries and departments if India has to grow by 10 per cent per annum until 2032. This, according to the action plan, will totally eradicate poverty from India in the next 16 years and also create 175 million new jobs.

"Growing at 10 per cent will transform India - India will be a $10 trillion economy with no poverty in 2032," the plan states. In 2015-16, the size of the Indian economy was a little over $2 trillion and the gross domestic product growth was around 7.6 per cent. As part of first steps in this grand plan, the government has set out to implement WTO-compatible procurement norms by 2017-18, achieve 100 per cent rural electrification by May 2018, increase rural teledensity to 100 per by 2020, reach broadband connectivity through optical fibre to all gram panchayats by December 2018 and have 175 million broadband connections by 2017.

The 23-page action plan also envisages reforms in the agriculture and allied sectors, including deregulation of genetically engineered (Bt) insect-resistant pulses by 2017-18, creation of buffer stock for pulses by 2017-18 and target 15 million metric tonnes of fish production by 2020. It also plans to implement seeding of Aadhaar number in 90 per cent of ration cards by the end of FY17. PAN (Permanent Account Number) is to be made mandatory for all businesses and entities and serve as unique business identifier also by the end of FY17.

The PM identified eight themes and decided to constitute eight groups of secretaries to come out with recommendations and a road map for each of the themes. The objective of the action plan was to foster development but with inclusive growth and efficiency..

The eight themes identified by the PM were - accelerated growth with inclusion and equity; employment generation strategies; universal access to quality health and education; good governance; farmer-centric Issues in agriculture and allied sectors; Swachh Bharat and Ganga Rejuvenation; energy conservation and efficiency and innovative budgeting and effective implementation.

The government plans to have proactive consultations with the states as they "have an important role in implementation of a number of these initiatives on pan-India basis."