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Economic Assessment of the Pradhan Mantri Ujjawala Yojana Scheme Research Team | Posted On Wednesday, March 04,2020, 05:52 PM

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Economic Assessment of the Pradhan Mantri Ujjawala Yojana Scheme



Energy consumptions are one of the major aspects that may propel economic growth. When consumption increases, it will consequently increase the demand for the product and opens the market through the acquisition of a new group of consumers. The consumption of other forms of energy products is on the higher side, but the consumption of LPG has still not penetrated the millions of rural and BPL households who still use unclean fuel for their day to day cooking. Therefore, the present government aims to penetrate these households and increase LPG consumption. The main objective is to introduce these families to the benefits of clean cooking fuel while driving sustainable growth and boosting the country’s economy through increased consumption.

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Impact of the scheme on the socio-economic factors of the country:

The main objective of the 'Pradhan Mantri Ujjwala Yojana' is to provide affordable and clean fuel to BPL families. Through the implementation of the PMUY scheme, the government aims to improve some basic problems of the BPL families. Here are some of the aspects that have been directly or indirectly improved with the implementation of the scheme:


The scheme may have a ripple-effect on the rural occupation. Other than pursuing traditional types of jobs, rural youths can enrol themselves under government agencies and help the government in the distribution and delivery of LPG cylinders in rural areas by supplying LPG to the needy. Thus the PMUY scheme opens employment opportunity for the people who are in search of manual jobs. On the other hand, the rural woman can find some relief and reduce their day-to-day labour by using clean cooking fuel. Reduced effort on cooking and lighting chullas will allow them time to engage in Self-help groups or other activities like weaving, handicrafts etc.

See Also: Performance of Pradhan Mantri Ujjwala Yojana


With clean cooking fuel, people can benefit economically as well by saving their income. Employment opportunities in rural areas are limited and most of the rural folks are either involved in the business of handicrafts or are seen involved in jobs in the unorganised sector. A majority of such people earn meagre wages that can only satisfy their basic needs.

Thus the implementation of the PMUY scheme is a boon to these sections of people. The scheme will enable them to save money as it promises to pay Rs. 1600 per year to the people living under the poverty level. Thus they can utilize this money in need; else they can purchase subsidised LPG and save a part of their income.


As already mentioned, clean fuel will indirectly solve a lot of problems among the rural population. One such instance can be in the case of receiving primary education. Most of the BPL families do not encourage children to go to school and receive education. Rather they engage children in household work like collecting wood and cow-dung for cooking purposes. By the implementation of the scheme, children can now get some time to go to school and receive minimum education. Thus the scheme indirectly promotes education.


One of the main objectives of the scheme is to reduce the number of diseases from unclean fuel. The scheme involves providing subsidised LPG to rural households to curb health hazards related to unclean cooking fuel and reducing the number of casualties. Smoke from chullas results in indoor air pollution thus exposing woman and children to diseases like heart disease, chronic obstructive pulmonary disease, stroke, throat problem, eye problem, lung cancer and severe respiratory ailments. The PMUY scheme thus protects woman and children from health hazards by providing free cooking LPG connections.

Economic factors associated with the scheme:

An assessment of the economic factors helps in understanding the success of the PMUY program. Through this assessment, we can evaluate the overall cost of implementing the program, the efficiency of the program and the contribution of the scheme towards economic growth. Here are the factors that are assessed to understand the importance of the scheme:

See Also: Pradhan Mantri Ujjwala Yojana (PMUY): LPG for every household

Imports of LPG:

Since the consumption of LPG is bound to grow due to the implementation of the scheme, The LPG imports are bound to increase. With the proper implementation of the scheme and making changes in some internal factors, the government is able to increase the demand for LPG. Data reveals that the LPG imports have spiked up to 8.9 million MT from abroad during the 2016-16 fiscal year.

Consumption of LPG:

If the trends of the LPG import ratio improve, there is a stimulating factor that increases consumption. The growing demand for LPG will help in opening a new group of customers and will thus drive other economic factors. The consumption of LPG has increased without any government intervention. However, the government is likely to cap the provision of free cooking energy LPG connection to the BPL. But it is likely that the scheme will fulfil its target due to increased consumption and functioning of economic factors together.

Demand for LPG:

Though income is the most prominent factor that drives consumption there are other factors too. The PMUY scheme will drive the consumption of LPG further because the government is implementing and promoting policies that are in favour of the people living below the poverty line. This will increase the demand for LPG among all section of the Indian population.

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