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Dharmendara Pradhan-I: What he could and could not deliver
Aug 23:
Dharmendra Pradhan may not have succeeded in tenure as the petroleum minister to perform his key function, which is to significantly raise the country's oil & gas production. India's import dependency is rising alarmingly in the face of growing demand and falling output. Measured in these terms alone, his performance has been sub par. Some will argue that five years is not enough for a turnaround and he has done what he can, by unleashing all the requisite policy measures to put Indian E&P on a firm long term footing. These policy initiatives will eventually have an impact, the argument will go. Gas output from long delayed ONGC discoveries will hopefully go up around the time he demits office and then pick up speed when the KG Basin discoveries come into production. The outlook however does not look all that encouraging when it comes to crude output.
8The petroleum minister will not go down as a hero to the average vehicle owner. The government's steel-like determination to stick to a no-subsidy regime even as the political cost is clearly evident will be applauded by economists and oil sector executives but not by the two wheeler rider. The logic here is a little fuzzy anyways. A political economist like Manmohan Singh will say it is better to transfer a fuel subsidy to the vehicle driver -- which in turn will spur the economy through higher general expenditure -- than to shore up the balance sheets of networth heavy oil companies. Eventually all that these oil companies create are low employment capital intensive projects. On the other hand, an energy economist will testify that cleaning the oil economy of diesel and petrol subsidies is a praise-worthy policy goal as it will help cleanse the messy energy economics of the country with immense long term benefits.
8Pradhan however is shrewd enough to know what he can and cannot deliver.
8What he is going to be remembered for is his execution skills under the Pradhan Mantri Ujjwala Yojana. A new survey has shown that the scheme has hit targeted low-income households with laser-like precision. This has earned him the Prime Minister's appreciation. For the BJP, there is political capital to reap.
8But Pradhan needs to do more before he can call the programme a success.
Here is the data:
8Only 16% of beneficiaries have shifted to LPG exclusively, while 81% use fuelwood or dung-cakes at least once a day to cook food.
8The poor exhibit a low rate of refilling LPG. Of the surveyed beneficiaries in M.P., U.P., and Chhattisgarh, 23% did not refill even once.
8Chhattisgarh has the highest percentage of PMUY beneficiaries (40%) who have not purchased a single refill since they finished using their first cylinder. But there is another reason for it.
8On an average, beneficiaries have to wait for between 19–22 days to order a refill from the LPG dealer after their previous cylinder is empty. This is because of the time needed to arrange the lump sum finance required to purchase a PMUY refill.
8Almost all beneficiaries use LPG mainly to prepare tea. Their use of LPG to prepare food is limited. Most beneficiaries do not use LPG during the winter months as the use of fuelwood has an extra benefit of keeping the house warm.
8Given the energy usage in rural households, LPG is not the least cost option.
Click on Reports for more
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8The petroleum minister will not go down as a hero to the average vehicle owner. The government's steel-like determination to stick to a no-subsidy regime even as the political cost is clearly evident will be applauded by economists and oil sector executives but not by the two wheeler rider. The logic here is a little fuzzy anyways. A political economist like Manmohan Singh will say it is better to transfer a fuel subsidy to the vehicle driver -- which in turn will spur the economy through higher general expenditure -- than to shore up the balance sheets of networth heavy oil companies. Eventually all that these oil companies create are low employment capital intensive projects. On the other hand, an energy economist will testify that cleaning the oil economy of diesel and petrol subsidies is a praise-worthy policy goal as it will help cleanse the messy energy economics of the country with immense long term benefits.
8Pradhan however is shrewd enough to know what he can and cannot deliver.
8What he is going to be remembered for is his execution skills under the Pradhan Mantri Ujjwala Yojana. A new survey has shown that the scheme has hit targeted low-income households with laser-like precision. This has earned him the Prime Minister's appreciation. For the BJP, there is political capital to reap.
8But Pradhan needs to do more before he can call the programme a success.
Here is the data:
8Only 16% of beneficiaries have shifted to LPG exclusively, while 81% use fuelwood or dung-cakes at least once a day to cook food.
8The poor exhibit a low rate of refilling LPG. Of the surveyed beneficiaries in M.P., U.P., and Chhattisgarh, 23% did not refill even once.
8Chhattisgarh has the highest percentage of PMUY beneficiaries (40%) who have not purchased a single refill since they finished using their first cylinder. But there is another reason for it.
8On an average, beneficiaries have to wait for between 19–22 days to order a refill from the LPG dealer after their previous cylinder is empty. This is because of the time needed to arrange the lump sum finance required to purchase a PMUY refill.
8Almost all beneficiaries use LPG mainly to prepare tea. Their use of LPG to prepare food is limited. Most beneficiaries do not use LPG during the winter months as the use of fuelwood has an extra benefit of keeping the house warm.
8Given the energy usage in rural households, LPG is not the least cost option.
Click on Reports for more
