Revamping India's Higher Education System

Legislation

Revamping India's Higher Education System

Kaushiki - April 29, 2010 Comments

The shortage of skilled man-power is a cause for concern in most sectors in India. Experts acknowledge that the present higher education system in India is not equipped to address this problem without some changes in the basic structure. Official records show that the gross enrollment ratio in higher education is only 11 per cent while the National Knowledge Commission says only seven per cent of the population between the age group of 18-24 enters higher education. Even those who have access are not ensured of quality. Despite having over 300 universities, not a single Indian university is listed in the top 100 universities of the world. Present Regulatory framework The present system of higher education is governed by the University Grants Commission (UGC), which is the apex body responsible for coordination, determination and maintenance of standards, and release of grants. Various professional councils are responsible for recognition of courses, promotion of professional institutions and providing grants to undergraduate programmes. Some of the prominent councils include All India Council for Technical Education (AICTE), Medical Council of India (MCI) and the Bar Council of India (BCI). The Central Advisory Board of Education coordinates between the centre and the states.

Universities in India can be established by an Act of Parliament or state legislatures such as Delhi University, Calcutta University and Himachal Pradesh University. Both government-aided and unaided colleges are affiliated with a university. The central government can also declare an institution to be a deemed university based on recommendation of the University Grants Commission. There are about 130 deemed universities and includes universities such as Indian Institute of Foreign Trade and Birla Institute of Technology. Such universities are allowed to set their own syllabus, admission criteria and fees. Some prominent institutions are also classified as institutions of national importance. Reforms in Higher Education There have been calls to revamp the regulatory structure, make efforts to attract talented faculty, and increase spending on education from about 4% of the Gross Domestic Product (GDP) to about 6%. Presently, the allocation for higher education is at a measly 0.7% of GDP. From time to time government appointed various expert bodies to suggest reforms in the education sector. The two most recent recommendations were made by the National Knowledge Commission (NKC) formed in 2005 under the chairmanship of Mr Sam Pitroda and the Committee to Advise on Renovation and Rejuvenation of Higher Education, formed in 2008 under the chairmanship of Shri Yashpal.

Key Recommendations of NKC	Key Recommendations of Yashpal Committee
Presently, India has about 350 universities. Around 1,500 universities should be opened nationwide so that India is able to attain a gross enrolment ratio of at least 15% by 2015. Existing universities should be reformed through revision of curricula at least once in three years, supplementing annual examination with internal assessment, transition to a course credit system, attract talented faculty by improving working conditions and incentives. A Central Board of Undergraduate Education should be established, along with State Boards of Undergraduate Education, which would set curricula and conduct examinations for undergraduate colleges that choose to be affiliated with them. An Independent Regulatory Authority for Higher Education (IRAHE) should be formed. IRAHE should be independent of all stakeholders and be established by an Act of Parliament. The UGC would focus on disbursement of grants and maintaining public institutions of higher learning. The regulatory function of the AICTE, MCI, and BCI would be performed by IRAHE. The IRAHE shall have the power to set and monitor standards, accord degree-granting power to institutions of higher education, license accreditation agencies, and settle disputes. Same norms shall apply to all institutions irrespective of whether they are public or private, domestic or international. Quality of education can be enhanced by stringent information disclosure norms, evaluation of courses by teachers and students, rethinking the issue of salary differentials within and between universities to retain talented faculty, formulating policies for entry of foreign institutions in India and the promotion of Indian institutions abroad.	The academic functions of all the professional bodies (such as UGC, AICTE, MCI, and BCI) should be subsumed under an apex body for higher education called the National Commission for Higher Education and Research (NCHER), formed through Constitutional amendment. The professional bodies should be divested of their academic functions. They should only be looking after the fitness of the people who wish to practice in their respective fields by conducting regular qualifying examination. Establish a National Education Tribunal with powers to adjudicate on disputes among stake-holders within institutions and between institutions so as to reduce litigation in courts involving universities and higher education institutions. Curricular reform should be the top-most priority of the NCHER. It should be based on the principles of mobility within a full range of curricular areas. Vocational education sector should be brought within the purview of universities. NCHER should promote research in the university system through the creation of a National Research Foundation. Practice of according status of deemed university be stopped till the NCHER takes a considered view on it. NCHER should identify the best 1500 colleges across India and upgrade them as universities. A national testing scheme for admission to the universities on the pattern of the GRE to be evolved which would be open to all the aspirants of University education, to be held more than once a year. Quantum of central financial support to state-funded universities should be enhanced substantially on an incentive pattern.
Sources: The Report to the Nation, 2006-09, NKC; Yashpal Committee Report, 2009; PRS

The Draft NCHER Bill, 2010 In response to the reports, the government drafted a Bill on higher education and put it in the public domain. The draft National Commission for Higher Education and Research Bill, 2010 seeks to establish the National Commission for Higher Education and Research whose members shall be appointed by the President on the recommendation of the selection committee (include Prime Minister, Leader of the Opposition in Lok Sabha, Speaker). The Commission shall take measures to promote autonomy of higher education and for facilitating access, inclusion and opportunities to all. It may specify norms for grant of authorisation to a university, develop a national curriculum framework, specify requirement of academic quality for awarding a degree, specify minimum eligibility conditions for appointment of Vice Chancellors, maintain a national registry, and encourage universities to become self regulatory. Vice Chancellors shall be appointed on the recommendation of a collegium of eminent personalities. The national registry shall be maintained with the names of persons eligible for appointment as Vice Chancellor or head of institution of national importance. Any person can appeal a decision of the Commission to the National Educational Tribunal. (For opinions by some experts on the Bill, click here and here.) Other Bills that are in the pipeline include The Foreign Educational Institutions (Regulation of Entry and Operation) Bill, 2010; the Central Educational Institutions (Reservation in Admission) (Amendment) Bill, 2010; and the Innovation Universities Bill, 2010.

Central government’s response to the COVID-19 pandemic (Jan 2020 - Apr 7, 2020)

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Anya Bharat Ram - April 8, 2020 Comments

On January 17, 2020, the Ministry of Health and Family Welfare acknowledged the emergence of a new coronavirus (COVID-19) that was spreading across China.[1] On March 11, 2020, the World Health Organisation declared the COVID-19 disease to be a global pandemic. As of April 7, 2020, there are 4,421 confirmed cases of COVID-19 in India.[2] Of these, 326 patients have been cured/discharged and 114 have died.¹

As the spread increased and more information about the virus was uncovered, the central government announced several policy decisions to contain it. Further, measures were also announced to support citizens and businesses who were affected by such containment measures. In this blog post, we summarise some of the key measures taken by the central government in this regard as of April 7.

Source: Ministry of Health and Family Welfare, PRS.

Movement restrictions

21-day lockdown in the country

The Ministry of Home Affairs announced a 21-day lockdown to contain the spread of COVID-19 from March 25, 2020 to April 14, 2020.[3] During the lockdown, all establishments, other than those providing essential goods and services, and those involved in agricultural operations, have been closed. Essential goods include items such as food, medicine, and electricity. Essential services include banking services, telecommunications, and pharmaceuticals. Transportation of all goods (essential or non-essential) will remain functional.[4]^,[5]^,[6]^,[7]^,[8]

All state/UT governments have been directed to: (i) arrange for shelter and food for the needy, including migrant workers, (ii) quarantine migrant workers for at least 14 days, (iii) direct employers to pay wages during the lockdown, and (iv) ensure landlords do not demand rent from workers and students for one month.[9]

Financial aid

Pradhan Mantri Garib Kalyan Yojana to provide relief against COVID-19

On March 26, the Finance Minister announced a relief package of 1.7 lakh crore rupees under the Pradhan Mantri Garib Kalyan Yojana for the poor.[10] Key features of the package are:¹⁰^,[11]

Insurance cover of Rs 50 lakh will be provided to health workers (such as doctors, nurses, paramedics and ASHA workers) who are treating patients of COVID-19.[12]
Five kilograms of wheat or rice and one kilogram of preferred pulses will be provided for free every month to poor families for the next three months.
Women account holders under the Pradhan Mantri Jan Dhan Yojana will get Rs 500 per month between April and June, and poor families will be given three free gas cylinders over the next three months.

Extension and relaxation in payment of taxes

The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 was promulgated on March 31, 2020.¹⁰ The Ordinance provides certain relaxations, such as extension of time limits and waivers of penalties, in relation to specified laws. These include the Income Tax Act, 1961 (IT Act), some Finance Acts, and the Prohibition of Benami Property Transactions Act, 1988. Key provisions under the Ordinance include:

Extension of time limits: The Ordinance extends the time limits (for the period between March 20, 2020 to June 29, 2020) for compliance of certain actions such as: (i) issuing notifications, completing proceedings, and passing orders by authorities and tribunals, (ii) filing of appeals, replies, and applications, and furnishing documents, and (iii) making any investment or payment for claiming deductions or allowances under the IT Act.
Interest and penalty: Payment of any tax, made before June 30, 2020 (or any further date specified by the government), will not be liable for prosecution or penalty. Also, the rate of interest payable for the delay in payment will not exceed 0.75% per month.
Donations to PM CARES Fund: Donations made by a person to the PM CARES Fund will be eligible for 100% tax deduction.
GST compliances: The central government may notify extension to time limits for various compliances under the Central Goods and Services Tax Act, 2017.

Measures by RBI to address the financial stress caused by COVID-19

The Reserve Bank of India (RBI) also announced several measures to address the stress in the economy caused by COVID-19.[13],[14]^,[15] Key measures are detailed below:

Cutting Policy Rates: The repo rate (the rate at which RBI lends money to banks) was reduced from 5.15% to 4.4%. The reverse repo rate (the rate at which RBI borrows money from banks) was reduced from 4.9% to 4.0%.
Liquidity management: Measures are being taken to expand liquidity in the market to ensure that financial markets and institutions can function normally. These measures include the reduction of the Cash Reserve Ratio (CRR) for all banks from 4% to 3% till March 26, 2021. CRR is the amount of liquid cash that banks have to maintain with the RBI, as a percentage of their total deposits. These steps are expected to inject total liquidity of Rs 3.74 lakh crore.
Relief to borrowers in repayment of loans: All banks and financial institutions (including NBFCs) are permitted to grant a moratorium of three months on payment of all term loan instalments (including agricultural, retail and crop loans) and interest on working capital loans (such as overdraft facilities), which are due between March 1, 2020 and May 31, 2020.

Short term credit to states

The Reserve Bank of India (RBI) has constituted an Advisory Committee to review the Ways and Means Advances (WMA) limits for states and UTs. WMA limits refer to temporary loans given by the RBI to state governments. Until the Committee submits its final recommendations, the WMA limit has been increased by 30% from the existing limit, for all states and UTs. The revised limits will be in force between April 1 and September 30, 2020.[16]

PM CARES Fund

The central government has set up a national fund to deal with emergencies like the COVID-19 pandemic. The public charitable trust known as the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) will provide relief to those affected by COVID-19. The trust is chaired by the Prime Minister and includes members such as the Defence Minister, Home Minister, and Finance Minister.[17]

Donations made by a person to the PM CARES Fund are 100% tax deductible.[18] Non-residents can also contribute to the Fund through foreign inward remittances.[19]

Health measures

COVID-19 testing

Currently, government facilities are offering free of cost diagnosis to all individuals with COVID-19 symptoms.[20] Further, the government has approved certain private laboratories to test individuals for COVID-19. The cost of screening in private labs may not exceed Rs 4,500.[21] As of April 7, there are 136 government testing centres for analysing samples of COVID-19 and 3 additional collection centres.[22] Further, there were 59 private labs offering testing in 12 states. These states are Delhi, Maharashtra, Kerala, West Bengal, Uttar Pradesh, Telangana, Tamil Nadu, Odisha, Karnataka, Haryana, Uttarakhand and Gujarat.[23]

The Ministry of Health and Family Welfare has also laid down guidelines for those who may be tested at these laboratories. These include: (i) symptomatic contacts of those who have tested positive for COVID-19, and (ii) symptomatic persons with a travel history to COVID-19 affected countries, (iii) symptomatic healthcare workers, and (iv) persons with severe respiratory diseases.²¹

Containment plan for large outbreaks

The Ministry of Health and Family Welfare has created a plan to contain the spread of the COVID-19 disease. Some of the measures suggested in the plan include:[24]

Geographic quarantine: This strategy requires the restriction of movement of people to and from a defined geographic area where there is a large outbreak.
Cluster Containment: This strategy will contain the disease within a defined geographic area by early detection of cases. Cluster containment will include geographic quarantine, social distancing, testing all suspected cases, and awareness amongst the public.

Restrictions on export of medicines and medical equipment

The central government placed restrictions on the export of certain medical equipment and medication so as to ensure its availability in India. For example, the export of ventilators, surgical masks, diagnostic kits, and medications such as paracetamol and hydroxychloroquine is restricted.[25]^{,[26],[27],[28]}

Travel restrictions

Domestic and international travel banned; issue of visas suspended

Civil Aviation: All passenger domestic air travel within the country is banned from March 24 till April 14, 2020.[29]^,[30] All international commercial passenger travel has been banned till April 14, 2020 (cargo and certain other flights are exempted).[31] All existing visas issued to nationals of any country except those issued to diplomats, officials, UN/international organisations, employment and project visas are suspended from March 13 till April 15, 2020.[32]

Railways: Indian Railways suspended all passenger trains till April 14, 2020.[33] Transportation of essential commodities will continue.[34] Railways has also made parcel vans available for quick transportation for e-commerce companies and other customers including state governments to transport certain goods. These include medical supplies, medical equipment, food, etc. in small parcel sizes.[35]

For a detailed summary of the main policy decisions taken by the central government with regard to COVID-19, please see here.

For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.

[1] Novel coronavirus outbreak in China, Ministry of Health and Family Welfare, January 17, 2020, https://www.mohfw.gov.in/pdf/TraveladvisorytotravelersvisitingChina17012020.pdf.

[2] Ministry of Health and Family Welfare website, last accessed on March 31, 2020, https://www.mohfw.gov.in/index.html.

[3] Order No. 1-29/2020-PP, National Disaster Management Authority, March 24, 2020, https://mha.gov.in/sites/default/files/ndma%20order%20copy.pdf.

[4] Order No. 40-3/2020-DM-I(A), Ministry of Home Affairs, March 24, 2020, https://mha.gov.in/sites/default/files/MHAorder%20copy.pdf.

[5] “Guidelines on measures to be taken by Ministries/Department of Government of India, State/Union Territory Governments and State/Union Territory Authorities for containment of COVID-19 Epidemic in the Country”, Ministry of Home Affairs, March 24, 2020, https://mha.gov.in/sites/default/files/Guidelines.pdf.

[6] Second Addendum to Order No. 40-3/2020-DM-I(A), Ministry of Home Affairs, March 24, 2020, https://mha.gov.in/sites/default/files/PR_SecondAddendum_27032020.pdf.

[7] “Consolidated Guidelines on the measures to be taken by Ministries/Departments of Government of India, State/Union Territory Governments and State/Union Territory Authorities for containment of COVID-10 Epidemic in the Country, as notified by the Ministry of Home Affairs on 24.03.2020 and further modified on 25.03.2020 and 27.03.2020”, Ministry of Home Affairs, https://mha.gov.in/sites/default/files/PR_ConsolidatedGuidelinesofMHA_28032020.pdf.

[8] D.O. No. 40-3/2020-DM-I(A), Ministry of Home Affairs, March 29, 2020, http://164.100.117.97/WriteReadData/userfiles/3rd%20Addendum%20to%20Lockdown%20Guidelines%20on%20exempted%20Goods%20and%20Services.pdf.

[9] Order No. 40-3/2020-DM-I(A), Ministry of Home Affairs, March 29, 2020, https://mha.gov.in/sites/default/files/MHA%20Order%20restricting%20movement%20of%20migrants%20and%20strict%20enforement%20of%20lockdown%20measures%20-%2029.03.2020.pdf.

[10] “Finance Minister announces Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus”, Press Information Bureau, Ministry of Finance, March 26, 2020.

[11] “Monetary and Fiscal policy response by Government of Indian and Regulators”, Department of Economic Affairs, Ministry of Finance, March 27, 2020, https://dea.gov.in/sites/default/files/India%20economic%20policy%20response%20on%20%20COVID%2019%20Fiscal%20and%20Monetary%20as%20on%2027032020.pdf.

[12] “Pradhan Mantri Garib Kalyan Package: Insurance Scheme for Health Workers Fighting COVID-19”, Press Information Bureau, Ministry of Health and Family Welfare, March 29, 2020.

[13] Seventh Bi-Monthly Policy Statement 2019-20”, Press Release, Reserve Bank of India, March 27, 2020, https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR2129F5E23A447E0F4A00955429716C53F5A2.PDF.

[14] “Statement on Developmental and Regulatory Practices”, Reserve Bank of India, Press Releases, March 27, 2020, https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49582.

[15] “COVID-19 – Regulatory Package”, Notifications, Reserve Bank of India, March 27, 2020, https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11835.

[16] RBI announces further measures for dealing with the COVID-19 pandemic, Reserve Bank of India, April 1, 2020, https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR2167BA409AC37FA8460497BA0C9B283E5DD9.PDF.

[17] Appeal to generously donate to ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)’, Press Information Bureau, Prime Minister’s Office, March 28, 2020, https://pib.gov.in/PressReleseDetailm.aspx?PRID=1608851.

[18] The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, Gazette of India, Ministry of Law and Justice, March 31, 2020, http://www.egazette.nic.in/WriteReadData/2020/218979.pdf.

[19] Rupee Drawing Arrangement – Remittance to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM-CARES) Fund, Reserve Bank of India, April 3, 2020, https://rbidocs.rbi.org.in/rdocs/Notification/PDFs/NOT2087A69F5158C174585A46C69B78BD96DBD.PDF.

[20] Strategy for COVID-19 testing in India, India Council for Medical Research, Ministry of Health and Family Welfare, March 17, 2020, https://www.mohfw.gov.in/pdf/LabTestingAdvisory.pdf.

[21] Guidelines for COVID-19 testing in private laboratories in India, Ministry of Health and Family Welfare, March 21, 2002 https://www.mohfw.gov.in/pdf/NotificationofICMguidelinesforCOVID19testinginprivatelaboratoriesiIndia.pdf.

[22] Government Approved Laboratories by ICMR, Ministry of Health and Family Welfare, April 7, 2020. https://icmr.nic.in/sites/default/files/upload_documents/Govt_Labs_functional_for_COVID19_testing_05042020.pdf.

[23] Private Approved Laboratories by ICMR, Ministry of Health and Family Welfare, April 7, 2020. https://icmr.nic.in/sites/default/files/upload_documents/Private_Labs_06042020.pdf.

[24] Containment Plan for Large Outbreaks, Ministry of Health and Family Welfare, April 4, 2020, https://www.mohfw.gov.in/pdf/3ContainmentPlanforLargeOutbreaksofCOVID19Final.pdf.

[25] S.O. 1171(E), Amendment in Export Policy of Masks, Ventilators and textile raw material for masks and coveralls, Ministry of Commerce and Industry, March 19, 2020, http://egazette.nic.in/WriteReadData/2020/218857.pdf.

[26] S.O. 955(E), Amendment in Export Policy of APIs and formulations made from these APIs, Ministry of Commerce and Industry, March 3, 2020, http://egazette.nic.in/WriteReadData/2020/216551.pdf.

[27] Notification no. 01/2015-2020, Amendment in Export Policy of Hydroxychloroquine, Ministry of Commerce and Industry, April 4, 2020, https://prsindia.org/files/covid19/notifications/1492.IND_Export_Restriction_Hydroxychloroquine_Apr_4.pdf.

[28] Notification no. 59/2015-2020, Amendment in Export Policy of Diagnostic Kits, April 4, 2020, https://prsindia.org/files/covid19/notifications/1491.IND_Export_Restriction_Diagnostic_Kits_Apr_4.pdf.

[29] AV. 11011/1/2020-US(AG) Office-MOCA, Ministry of Civil Aviation, March 23, 2020, https://www.civilaviation.gov.in/sites/default/files/Revised-%20COVID-19%20-%20Order%20under%20Section%208B.pdf.

[30] No.4/1/2020-IR, Director General of Civil Aviation, March 27, 2020, https://dgca.gov.in/digigov-portal/Upload?flag=iframeAttachView&attachId=130618666.

[31] No.4/1/2020-IR, Director General of Civil Aviation, March 26, 2020, https://dgca.gov.in/digigov-portal/Upload?flag=iframeAttachView&attachId=130618625.

[32] No.4/1/2020-IR, Director General of Civil Aviation, January 30 to March 17, 2020, https://dgca.gov.in/digigov-portal/Upload?flag=iframeAttachView&attachId=130617742.

[33] “Ministry of Railways extends Cancellation of Passenger Train Services till 2400 hrs of 14th April, 2020”, Press Information Bureau, Ministry of Railways, March 25, 2020.

[34] “Transportation of essential commodities to various parts of the country by Indian Railways continues at full speed”, Press Information Bureau, Ministry of Railways, March 30, 2020.

[35] “Indian Railways to run Special Parcel Trains for carriage of essential items in small parcel sizes during the complete lockdown in fight against COVID-19”, Press Information Bureau, Ministry of Railways, March 29, 2020.

Recent rise in LPG prices

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Anurag Vaishnav - February 20, 2020 Comments

Last week, oil-marketing companies (or OMCs, such as Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited) raised the price of domestic LPG in the country. [1] The price of a domestic cylinder (14.2kg) has increased from Rs 714 in January 2020 to Rs 858.5 in February 2020. This is a 20% hike in the price of a LPG cylinder. Note that this is the sixth consecutive month for which LPG prices have been revised upwards. Figure 1 shows the variation in price of a domestic (non-subsidised) LPG cylinder in Delhi over the last year.

Figure 1: Variation in price of non-subsidised domestic LPG cylinder

Sources: Indian Oil and Corporation Limited; PRS.

How is the price of LPG cylinders determined?

LPG prices are revised every month. The price is determined by public sector OMCs namely, Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited, in line with the changes in the international market prices and other market conditions. [2] The international market price affects the import parity price of petroleum products (the price that importers pay for import of product at the respective Indian ports). This includes exchange rate, ocean freight, insurance and customs duty among others.

The Ministry of Petroleum and Natural Gas has stated that the recent hike in the price of LPG cylinder is due to a sharp rise in international LPG prices during January 2020 (from USD 448/Metric Tonne to USD 567/Metric Tonne). [3]

What is the difference between the price of a subsidised and non-subsidised cylinder?

The price determined by the OMCs reflects the price of a non-subsidised domestic LPG cylinder. The government modulates the effective price to provide subsidised LPG cylinders to consumers under the 'Pratyaksha Hastaantarit Laabh' direct benefit transfer (or DBT-PAHAL) scheme. [4] Under the scheme, a consumer (with annual income of up to Rs 10 lakh) can avail DBT cash-subsidy for a LPG cylinder. The beneficiaries buy LPG cylinders at market rate and subsequently receive subsidy directly in their bank accounts.

With the recent increase in price of a LPG cylinder, the government has increased the subsidy amount for PAHAL consumers from Rs. 153.86 per cylinder to Rs. 291.48 per cylinder (89% increase).³ This is done to ensure that the subsidized LPG consumers are insulated from the volatility of LPG prices in the international market. Table 1 shows the amount of subsidy provided by the government for LPG cylinder. Note that price of a subsidised cylinder has increased from Rs 494 to Rs 567 (14.8%) from February 2019 to February 2020.

Table 1: Difference between the price of subsidised and non-subsidised LPG cylinder

As on	Non-subsidised cylinder	Subsidised cylinder	Subsidy
February 2018	Rs 736.00	Rs 495.63	Rs 240.37
February 2019	Rs 659.00	Rs 493.53	Rs 165.47
February 2020	Rs 858.50	Rs 567.02	Rs 291.48

Sources: Unstarred Question No.1211, February 13, 2019, Ministry of Petroleum and Natural Gas, Rajya Sabha.
Note: Prices are at Delhi.

How many people avail the subsidy on LPG cylinders?

Currently, there are a total of 27.16 crore LPG (domestic) connections in the country.³ Of these, 26.12 crore (94%) consumers are beneficiaries under the PAHAL scheme, and therefore, can avail LPG cylinders at subsidised rates. Note that, under the scheme, a maximum of 12 subsidised cylinders per year can be availed under one connection. Further, a household cannot have more than one connection.

What is the cost of subsidy for the government?

The subsidy on domestic LPG is met through the budgetary grants of the Ministry of Petroleum and Natural Gas. In 2020-21, the government is estimated to spend Rs 37,256 crore on LPG subsidy. This includes Rs 35,605 crore for DBT-PAHAL and Rs 1,118 crore for Pradhan Mantri Ujjwala Yojana. This is an increase of 9.3% from the expenditure in 2019-20 of Rs 34,086 crore (revised estimate). Note that LPG subsidy constitutes 87% of the Ministry's total budget (Rs 42,901 crore).

Figure 2 below shows the year-wise expenditure on LPG subsidy, and as a proportion of the total budget of the Ministry from 2015-16 to 2020-21.

Figure 2: LPG subsidy over the years (2015-16 to 2020-21).

Sources: Union Budget Documents; PRS.

For more trends and analysis related to the finances of the Ministry of Petroleum and Natural Gas, see here.

[1] "LPG price hiked by Rs 144.5 per cylinder", Economic Times, February 12, 2020, https://economictimes.indiatimes.com/industry/energy/oil-gas/lpg-price-hiked-by-rs-144-5-per-cylinder/articleshow/74096745.cms.

[2] Frequently Asked Questions (FAQ), Petroleum Planning and Analysis Cell, https://www.ppac.gov.in/content/137_3_Faq.aspx.

[3] "LPG Price is Derived based on International Market Price", Press Information Bureau, Ministry of Petroleum and Natural Gas, February 13, 2020.

[4] PAHAL-Direct Benefits Transfer for LPG (DBTL) Consumers Scheme, Ministry of Petroleum and Natural Gas, http://petroleum.nic.in/dbt/whatisdbtl.html.

Revamping India's Higher Education System

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