PMUY 2.0 nears 10 mn LPG connections target, 9.5 mn KYCs already in place

The second phase of the Pradhan Mantri Ujjwala Yojana (PMUY) initiative is well underway, with the goal of disbursing 10 million additional Liquefied Petroleum Gas (LPG or cooking gas) connections now in sight.

Know-your-customer (KYC) approvals for 9.5 million new applications have already been received by the public sector oil marketing companies that are executing the system, according to oil ministry officials. Before commencing services, institutions must go through a KYC procedure to check the details of the intended recipient. A recipient's KYC approval gets them one step closer to receiving the desired benefit.

“From August 10 to September 15, 2.3 million additional deposit-free LPG connections were distributed,” an official told Business Standard.

“Bihar has received the largest number of connections (605,000) so far. West Bengal is in second place with 334,000 people, while Gujarat is in third place with 281,000 people,” he added.

Mr. Narendra Modi, Prime Minister of India, launched PMUY 2.0 on August 10 through video conferencing LPG connections in Mahoba, Uttar Pradesh. “Self-certifications will be given more significance in the second phase of the Ujjwala scheme. Those who move out of their hometowns in search of work will be able to get these deposit-free LPG connections,” Mr. Modi said.

PMUY recipients are obtaining connections under easier KYC standards, according to an official from the oil ministry. Since the focus is on migrants, KYC clearances are taking place regardless of the beneficiaries' Aadhar card addresses.

“People from all across UP and other states, including Bundelkhand, went from village to city or to other states for work. They are confronted with the issue of address verification there. These workers from other locations no longer have to rush from pillar to post in search of proof of address. The government has complete trust in the migrant workers' honesty. To obtain a gas connection, all that is required is a self-declaration of address.” Mr. Modi said in his speech, referring to the poll-bound Uttar Pradesh (UP).

The Centre underpins the PMUY initiative by giving monetary assistance of up to Rs. 1,600 (US$ 21.67) per beneficiary for the installation of a new LPG connection. The recipient is responsible for the purchase of the Hot Plate (LPG stove) and the first refill. To make this more reasonable, the recipient is given a zero-interest loan from Oil Marketing Companies. The oil firms recover the borrowed money through a rebate accumulated on subsequent cylinder refill purchases by the recipients. Finance Minister Mrs. Nirmala Sitharaman declared a new aim of adding 10 million more PMUY beneficiaries to the existing 80 million in her February 2021 Budget address.

By March 2022, the total number of Liquefied Petroleum Gas (LPG, or cooking gas) customers in the country would have surpassed 300 million. In the country, there are around 207.2 million non-PMUY LPG users.

The populist PMUY programme is being implemented this year, just in time for the important Uttar Pradesh assembly elections in early 2022. With roughly 15 million current PMUY beneficiaries, Uttar Pradesh has the highest number of beneficiaries of any state in the country. With about 9 million people each, West Bengal and Bihar rank in second and third. In addition to Uttar Pradesh, polls will be held in Goa, Manipur, Punjab, and Uttarakhand in February/March 2022.

During the first wave of the Covid-19 pandemic, the centre gave three free cylinder refills to PMUY beneficiaries as part of the Aatmanirbhar Bharat Package to help lower-income households. This cost the exchequer Rs. 9,670.41 crore (US$ 1.3 billion) was distributed to PMUY beneficiaries for the purchase of LPG refills from April to August 2020 under the Pradhan Mantri Garib Kalyan Yojana. This increased total LPG use in the country, whereas most other fuels saw a decrease from 2020 to 2021.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.