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Union cabinet approves Ujjwala Yojana 3.0 at ₹1,650 crore
Experts said that the move will certainly benefit the ruling BJP in forthcoming assembly polls and the general election in 2024.
A fortnight after slashing cooking gas rates by ₹200 per cylinder for 330 million customers ahead of crucial elections, the government on Wednesday launched the third phase of its popular Ujjwala scheme to provide free gas connections along with a stove and a refill to 7.5 million poor households for three years. This phase takes the total coverage under the scheme to 103.5 million households.
Read here: Key takeaways from the reduction in LPG prices
Briefing the media about decisions taken by the Cabinet under the chairmanship of Prime Minister Narendra Modi, Union information and broadcasting minister Anurag Thakur said the government has approved extension of Pradhan Mantri Ujjwala Yojana (PMUY) to provide 7.5 million free liquefied petroleum gas (cooking gas) connections up to March 31, 2026.
Under the scheme, beneficiaries will receive a deposit-free gas connection, including one stove and the first 14.2kg cylinder free of cost, he said. One such connection would cost ₹2,200 to the exchequer, a cost which will be initially borne by state-run oil marketing companies, with the government reimbursing them later. According to Thakur, the scheme is estimated to cost ₹1,650 crore.
Thakur said the scheme has been extended to include those eligible households that do not have LPG connections for various reasons such as formation of new nuclear family.
Experts said that the move will certainly benefit the ruling BJP in forthcoming assembly polls and the general election in 2024.
“Upliftment of the poor is the purpose of any democracy and polls catalyse this process. The move will certainly benefit the poor, creating political dividend for the ruling party,” said Keshav Mishra, professor at the Banaras Hindu University (BHU). Mishra sought to distinguish the scheme from other freebies or sops. “This scheme was well conceived, targeted, and has so far benefited 96 million poor families, and is hence different from untargeted freebies offered by some parties only to win polls.”
According to official data, Pradhan Mantri Ujjwala Yojana (PMUY or Ujjwala 1.0) was launched in Ballia (Uttar Pradesh) by PM Modi on May 1, 2016, to provide clean cooking fuel to about 80 million poor households across the country. The target was achieved in September 2019. Later, PMUY phase-2 (or Ujjwala 2.0) was launched from Mahoba district of poll-bound UP in August 2021 with an initial target of 10 million connections, which was achieved by January 2022. Subsequently, the government released 6 million more connections under Ujjwala 2.0 till December 2022. Now the government has announced a third phase of the scheme.
Read here: Govt to give 75 lakh new Ujjwala LPG connections, PMUY cylinder subsidy now ₹400
Last month, on August 29, the Cabinet announced slashing the price of cooking gas by ₹200 per 14.2kg cylinder for all 330 million users to ease the strain on household finances hit by soaring retail inflation that came in at a 15-month high of 7.44% in July; this fell to 6.83% in August, but still above the Reserve Bank of India’s tolerance band of 6%. Experts expect an impact of the subsidy to reflect in lower inflation in September. The move made LPG cylinders cheaper by ₹400 per refill for 96 million Ujjwala beneficiaries, who were already receiving a subsidy of ₹200. The other 234 million users, who were previously not eligible for a subsidy – the government scrapped subsidies on LPG in 2020 – now stand to benefit from a subsidy of ₹200 a cylinder.
