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Ujjwala scheme: Indian Oil, others defer loan recovery up to 6 LPG refills

Ujjwala scheme: Indian Oil, others defer loan recovery up to 6 LPG refills

In news:

In an attempt to boost domestic cooking gas consumption under the Pradhan Mantri Ujjwala Yojana (PMUY), or Ujjwala scheme, state-owned oil marketing companies (OMCs) announced deferment of loan recovery up to six refills.

The Ujjwala scheme:

  • PMUY, launched in 2016
  • To safeguard the health of women and children by providing them with LPG
  • To protect women and children from smoke while cooking or from having to go into unsafe areas to collect firewood.
  • Under the scheme, the government aims to provide cooking gas to poor households and has covered 713 districts.
  • The scheme aims to replace cooking fuels, used mostly in rural India, with clean liquefied petroleum gas (LPG).
  • Ujjwala scheme provides financial support of Rs1,600 for each cooking gas connection to eligible households.
  • The connections are given in the name of the women heads of the households.

Loan:

  • A PMUY beneficiary has the option to pay upfront for the purchase of the LPG stove and cylinder or can avail a loan from the OMC to pay for the same.
  • Many availing an equated monthly instalment (EMI) facility for meeting the cost of stove and first refills
  •  If the beneficiary avails a loan, then the cost of LPG stove or cylinder or both is recovered on EMI basis by the OMCs from the subsidy amount due to the beneficiary on purchase of each refill.

Deferment of loan recovery

  • From now on, OMCs will start recovering the loan amount only after the sixth refill.
  • As per the data available, about 70% of the PMUY customers have availed interest free loan facility provided by OMCs towards financing LPG stove and/or first LPG cost.

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