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DBTL Performance EvaluationInsights from the World’s Largest Subsidy Benefit Transfer Scheme

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April 2016 |

Citation: Abhishek Jain, Shalu Agrawal, and Karthik Ganesan (2016) ‘DBTL Performance Evaluation: Insights from the World’s Largest Subsidy Benefit Transfer Scheme’, May

Overview

The modified Direct Benefit Transfer for LPG (DBTL) scheme was launched in January 2015 to provide LPG subsidies directly into consumers’ bank accounts. The Council, in collaboration with the International Institute for Sustainable Development (IISD), conducted an independent performance evaluation of the scheme across Gujarat, Haryana and Kerala. The evaluation focused on assessing the efficacy of the scheme against its stated objectives and its implementation process, as well as the experiences of key stakeholders with the scheme’s implementation and impact.

India has a mammoth 164 million active LPG connections. However, well-to-do households remain the primary beneficiaries, with 40 per cent of the LPG subsidy benefitting the richest 20 per cent.

The analysis, the first of a two-part series, found that the scheme’s implementation was fairly successful with high levels of enrolment and customer satisfaction. 85 per cent of the distributors surveyed reported significant impact of the scheme on controlling both the diversion of cylinders and the multiple connections.

Since 2015, government has initiated reforms such as the ‘Give it Up’ campaign (nudging the well-off to voluntarily surrender their subsidy claims) and DBTL to improve the targeting of subsidies and reduce leakages. The first phase of the ACCESS Survey, had found that 95 per cent of rural households without LPG cited their inability to afford an LPG connection as a major barrier to switching to cleaner cooking fuels.

Source: HPGas/Flickr

Key Findings

  • Seventy-five per cent of the consumers received their subsidy in their bank accounts, evenly across rural and urban areas.
  • The scheme had a significant impact on controlling the diversion of cylinders and having multiple connections.
  • Every second household reported improved, timely delivery of LPG cylinders in the months following the scheme’s implementation.
  • A majority of the distributors faced difficulties during the seeding process, due to delays in document verification and high rates of rejection.
  • Variations in protocols followed across banks, lack of dedicated resources and lack of coordination between headquarters and local branches were major issues.
  • Key factors that made the scheme successful ranged from institutional coordination, effective utilisation of government schemes, and a strong emphasis on creating awareness to independent performance assessment exercises.

Challenges faced by distributors during the DBTL rollout

Source: CEEW analysis, 2016

Key Recommendations

  • Plan a more careful assessment to estimate the scheme’s impact on weeding out duplicate connections.
  • Resolve issues such as non-receipt of subsidy (higher in rural areas) and lack of information about subsidy transfer (16.6 per cent consumers were unaware to ensure that the subsidy reaches all deserving households.
  • Make financial inclusion more effective as DBTL may pose a barrier to LPG access as LPG penetration increases in rural areas.
Key challenges for the future will be to enhance the targeting of LPG subsidies, while promoting the transition from kerosene use to grid and off-grid electricity for lighting in rural India.

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Equity by accident, or by design?

Solar powered healthcare in developing countries


July 2018 |

Overview

The lack of electrification in parts of the world leaves many healthcare facilities with inadequate power provision for even basic services. It is estimated that nearly 38 million people in India are dependent on Primary Health Centres (PHCs) without electricity supply. Pilot projects show that solar power has the potential to reliably electrify PHCs, bypassing unreliable centralised grids.

Following up on our independent evaluation of 147 PHCs across 15 districts in Chhattisgarh, this journal paper, published in Nature, reiterates the immense opportunity for solar energy to bridge the gaps in electricity access in rural healthcare facilities across the developing world.

Key Highlights

  • PHCs with solar power conducted 50 per cent higher institutional deliveries and provided round round-the-clock services.
  • Nearly 70 per cent of health centres with solar power provided emergency medical services 24 hours a day, seven days a week as compared to 48 per cent without solar.
  • Solar-powered PHCs reported a 59 per cent increase in outpatient services, 78 per cent increase in deliveries and 45 per cent improvements in laboratory services after installation.
  • Energy is a critical enabler in achieving several other sustainable development goals (SDGs). Research reveals that 113 SDG targets require actions pertaining to energy systems. There is evidence that access to clean energy (SDG 7) can positively reinforce attainment of health and well-being (SDG 3), sustainable cities and communities (SDG 11) and responsible consumption and production (SDG 13).
  • More and better designed trials are required to build the necessary policy and financial support for scaling solar for healthcare.
  • More holistic policy thinking across ministries and departments is needed to recognise funding opportunities with multiple benefits.

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Lessons from the World’s Largest Subsidy Benefit Transfer SchemeThe Case of Liquified Petroleum Gas Subsidy Reform in India

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August 2018 |

Citation: Jain, A., Agrawal, S., & Ganesan, K. (2018). Lessons from the World’s Largest Subsidy Benefit Transfer Scheme. In H. Van Asselt (Author) & J. Skovgaard (Ed.), The Politics of Fossil Fuel Subsidies and their Reform (pp. 212-228). Cambridge: Cambridge University Press. doi:10.1017/9781108241946.014

Overview

This book chapter, published in ‘The Politics of Fossil Fuel Subsidies and their Reform’, examines the performance of the Direct Benefit Transfer of LPG (DBTL) scheme. The chapter focuses on three key questions – (i) How successful was the implementation process of the scheme, and what were the gaps in implementation, if any? (ii) How successful was the scheme in achieving its stated objectives? (iii) Why did the DBTL scheme achieve this degree of success?

In the pursuit of answering these questions, the authors focused on key actors and stakeholder groups, and strategies used to design and administer the scheme while overcoming challenges during the scheme’s implementation. As part of the assessment process, authors used mixed-methods approach, comprising structured telephonic survey of 1,270 households and 92 LPG distributors, semi-structured telephonic interviews with implementation officers and bank managers, and unstructured in-person interviews with senior management of the oil marketing companies and government officials.

Key Lessons

The following lessons could be useful for designing fossil fuel subsidy reforms in other contexts and countries.

Political leadership and framing of the narrative is crucial: Strong leadership from the national government, timely recognition of the opportunity for reform, and smart framing of the narrative have been prime factors behind the successful and smooth implementation of the world’s largest cash transfer scheme, as it infused a momentum throughout the range of actors along the LPG supply chain involved in the implementation process.

Successful institutional coordination: The scheme’s implementation process involved multiple stakeholders, including several government ministries, the entire LPG retail supply chain, the banking sector and the district-level administration. An elaborate multi-tiered structure of project management teams was formed to facilitate coordination and to enable troubleshooting during the implementation.

Exploiting motivations at the individual level and supporting capacity building important: Giving individual ownership and responsibility to stakeholders is instrumental in the implementation of such large-scale public programmes. The senior and middle managers of the OMCs, along with the officials and Minister at the Ministry of Petroleum and Natural Gas, were the guardian officers for one district each. This created a sense of responsibility for effective implementation of the scheme in their respective districts.

Learning from past experience necessary to avoid failures: The modified DBTL scheme incorporated insights from a review of the scheme’s first round of implementation. The review included an alternative enrolment procedure which addressed the politically sensitive issue of exclusion of LPG consumers lacking an Aadhar number and also identified the difficulties faced by different stakeholders. Reviewing reform programmes and incorporating feedback of key stakeholders, particularly end-consumers, improved the scheme design and implementation process.

Leveraging existing systems and schemes: The DBTL scheme rested on the effective use of several other government schemes and efforts. While there was a clear convergence of past and ongoing schemes, sustained efforts continued to improve banking infrastructure and services for all households, particularly as rural and/or economically poor households constitute majority of future LPG adopters in India.

Strong emphasis on awareness generation: The DBTL scheme was well-publicised through an intensive information education campaign comprising advertising through different media and direct outreach to consumers through text messages, calls and public announcements.

The scheme’s implementation has been largely successful indicated by very low proportion of households facing difficulties during enrolment and also in limiting the diversion of subsidised commodity to unintended uses. However, there remain gaps in cash transfer efficiency, as well as associated information flow. Improvements pertaining to human resource management, standardisation of protocols and consumer awareness are required. There must be emphasis on financial inclusion and access to banking services to ensure that DBTL would not pose additional barriers to LPG adoption, particularly in rural India.

The Cambridge University Press book is the first of its kind academic collection of analyses delving deep into the politics and political economy of the fossil fuel subsidies. The book understands the conceptual aspects of fossil fuel subsidies, offers valuable insights for international community to enable fossil fuel subsidies reforms and explores the role of various intergovernmental and non-governmental institutions in promoting fossil fuel subsidy reform at the international level.

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Clean Energy Can boost Rural Economy

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