What’s Cooking? Cooking gas subsidy doubled in a month

New Delhi: The Union government has made its second upward revision in just over a month to the subsidy on LPG, commonly known as cooking gas, raising it to Rs 300 per cylinder for low-income households under the Pradhan Mantri Ujjwala Yojana. This marks a Rs 100 increase from the previously announced subsidy of Rs 200 in August.

Union Minister Anurag Thakur officially confirmed this increase, affirming that "beneficiaries of the Ujjwala Yojana will now receive a subsidy of Rs 300, up from the previous Rs 200." With this latest adjustment, Ujjwala beneficiaries will now get a total subsidy of Rs 500, effectively allowing them to purchase gas cylinders at a reduced price of Rs 600. As the country braces for several state elections this year and the all-important general elections in 2024, supporting economically disadvantaged households and shielding them from escalating energy costs seem to have gained momentum.

Considering that the millions of poorer households across the country constitute a substantial voter base, extending them financial relief could significantly improve the prospects of the ruling BJP-led NDA government.

Today's announcement is anticipated to benefit approximately 9.6 crore impoverished households encompassed within the Ujjwala welfare scheme, according to Anurag Thakur's statement. While the precise financial implications of this subsidy hike have not been disclosed, the government had previously estimated an expenditure of approximately Rs 11,600 crore on cooking gas subsidies for the current fiscal year, which concludes on March 31.

Sunil Sinha, an economist at India Ratings, suggested that this recent move could be a part of the government's strategic endeavor to stave off higher inflation as elections draw near. "As elections are approaching, the government would not want higher inflation to offset their past and recent achievements," Sinha said. It may be noted here that despite a decrease in August, inflation remains above the Reserve Bank of India's upper target of 6 per cent.

While lower food prices contributed to the reduced inflation of 6.83 per cent in Aug ust, the cost of oil and gas is on a rapid ascent -- a matter that is closely being monitored by the ruling government in the wake of upcoming elections.