Rationalising Subsidies, Reaching the Underserved - Improving Effectiveness of Domestic LPG Subsidy and

The primary objective of this study is to analyse the efficacy of LPG subsidy in making clean cooking fuel affordable for households across the economic strata; and to suggest appropriate reforms to rationalise the subsidy mechanism to meet the energy needs of underserved population. [...] It is based on a systemic investigation of contemporary issues, review of recent literature, and utilises the data on consumption patterns and the associated expenditures of the th Indian population (based on the data of 68 Round of the NSS). [...] The Indian government, in implementing the extensive subsidy programme for fossil fuels, is of the view “that in order to insulate the common man from the impact of rise in international oil prices and the domestic inflationary conditions, the Government has to modulate the Retail Selling Price (RSP) of sensitive petroleum products” (MoPNG, 2014a). [...] 6.2 Rationalising the price of subsidised LPG Apart from the reduction in the cap on subsidised cylinders, further rationalisation of the LPG subsidy could be considered on the basis of income or economic status of the households. [...] The availability of LPG for the households could be attributed to multiple factors such as distance from the nearest distributor, ease of obtaining a connection, delivery mechanism (home delivery or pay and take basis), and finally the ability of OMCs to supply to the distributor to cater to the demand.