On Wednesday, the Union cabinet increased LPG cylinder subsidy from ₹200 to ₹300 per cylinder for approximately 96 million low-income households. This decision coincides with the upcoming assembly elections in five states and the forthcoming national polls next year.
The move to provide additional subsidies, particularly targeting rural women, comes just a month after the government’s approval to expand the PM Ujjwala Yojana scheme. This expansion aims to benefit 7.5 million more women, bringing the total number of beneficiaries to 103.5 million within the next three years.
Under the Ujjwala Yojana, beneficiaries who used to pay ₹703 for a 14.2-kg cylinder, compared to the market price of ₹903, will now only pay ₹603. LPG cylinder subsidy adjustment follows the recent reduction of cooking gas cylinder prices by ₹200 for all consumers.
This increase in cooking gas subsidies and the expansion of the Ujjwala Yojana program are geared towards providing support to women, especially in light of upcoming elections. During a recent special Parliament session, a law was passed to allocate one-third of parliamentary and assembly seats to women, emphasizing the government’s commitment to gender equality and empowerment.
Anurag Thakur, the Minister of Information and Broadcasting, Youth Affairs, and Sports, provided insights to reporters regarding recent cabinet decisions. He refrained from specifying the exact impact of the decision on the government’s finances but emphasized the government’s commitment to the welfare of the poor, stating, “When we talk about the welfare of the poor, the government is not concerned with the financial burden on the exchequer but (only) on helping the poor.”
Over the years, the government has undertaken significant reforms in the petroleum subsidy system, with LPG being the sole fuel for which a subsidy is offered. In the budget for the fiscal year 2023-24, the government allocated a modest ₹2,257 crore for LPG subsidies. However, this figure is expected to rise substantially due to the expanded coverage of the Ujjwala scheme and the increased LPG cylinder subsidy payments.
Let’s break down the potential impact of the recent decision: Assuming that a Ujjwala beneficiary consumes four LPG cylinders annually, and does not account for the planned expansion of the scheme, the announced ₹100 per LPG cylinder subsidy increase would result in an additional burden of ₹3,840 crore on the LPG cylinder subsidy bill. This signifies a significant financial commitment to support the increased coverage of the Ujjwala scheme and to ease the financial burden on low-income households.
As of the end of August, the central government’s expenditure on food, fertilizer, and petroleum subsidies amounted to ₹1.8 trillion, constituting nearly half of the total annual allocation. This expenditure represents a significant increase compared to the same period last year when it stood at ₹1.4 trillion. The finance ministry confirmed last month that it intends to adhere to its market borrowing plan of ₹6.5 trillion for the second half of the fiscal year, with the government also exploring other sources of debt.
In a separate development, the cabinet has granted approval for the establishment of the Sammakka Sarakka Central Tribal University in Telangana’s Mulugu district. An allocation of ₹889.07 crore has been earmarked for this project. An official statement noted that the new university’s creation aims not only to enhance access to and the quality of higher education in the state but also to foster opportunities for higher education and the advancement of knowledge. It will achieve this by providing instructional and research facilities in tribal art, culture, and traditional knowledge systems, primarily benefiting the tribal population within the state.
Furthermore, the cabinet gave its nod to the terms of reference for the Krishna Water Dispute Tribunal-II, operating under the Inter-State River Water Disputes (ISRWD) Act, 1956. This development comes in response to concerns raised by Telangana through its complaint filed under the Act. The tribunal’s primary objective will be to address the issues surrounding the utilization, distribution, and regulation of Krishna River waters, thus resolving the dispute between Telangana and Andhra Pradesh. It’s worth noting that Telangana was carved out from Andhra Pradesh in June 2014.
Additionally, the government-sanctioned a proposal for the promulgation of the Tenancy Regulation, 2023, under Article 240 of the Indian Constitution. This regulation will be applicable in the Union territories of Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu, and Lakshadweep islands. Its implementation will establish a legal framework aimed at fostering transparency and accountability in the rental property ecosystem within these Union territories.
Additionally, the government has officially announced the establishment of the National Turmeric Board. This board will play a pivotal role in advancing research and development efforts to boost turmeric exports from India. The ambitious target is to achieve annual turmeric exports of $1 billion by 2030, a significant increase from the approximately $207.45 million recorded in 2022-23.
Furthermore, the Cabinet Committee on Economic Affairs has undertaken a budget revision for the completion of the North Koel Reservoir Project. This project is aimed at addressing drought-prone regions, encompassing Palamu and Garhwa districts in Jharkhand, as well as Aurangabad and Gaya districts in Bihar. The revised project cost is now set at ₹2,430.76 crore, with the central government’s contribution amounting to ₹1,836.41 crore. This figure represents an increase from the previous approved budget of ₹1,622.27 crore, which included the central government’s share of ₹1,378.60 crore.
