Over the last couple of weeks, MNREGA is back in the spotlight. The Union Minister for Rural Development wrote to certain states regarding potential misuse of funds, and it was announced that rural development schemes are open to CAG audit. In large schemes like MNREGA, officials at all levels of government - central, state, district, block, panchayat - have roles to play. This can make it difficult to locate the responsible authority in case implementation issues arise. We list the responsibilities of different government agencies involved in implementation of MNREGA in the Table below.
| Stakeholder | Responsibilities | |
| Gram Sabha | (a) recommending works; (b) conducting social audits on implementation every six months; and (c) functioning as a forum for sharing information. | |
| Gram Panchayat | (a) planning works; (b) receiving applications for registration; (c) verifying applications; (d) registering households; (e) issuing job cards, (f) receiving applications for employment; (g) issuing detailed receipts; (h) allotting employment within 15 days of application; (i) executing works; (j) maintaining records; (k) convening Gram Sabha for social audit; and (l) monitoring implementation at the village level. | |
| Intermediate Panchayat | (a) consolidating Gram Panchayat plans into a Block plan and (b) monitoring and supervision at the block level. | |
| Programme Officer (PO) | (a) ensuring work to applicants within 15 days; (b) scrutinising Gram Panchayat annual development plans; (c) consolidating proposals into a Block plan and submitting to intermediate panchayat; (d) matching employment opportunities with demand for work at the Block level; (e) monitoring and supervising implementation; (f) disposing of complaints; (g) ensuring that Gram Sabha conducts social audits; and (h) payment of unemployment allowance. | |
| District Panchayat | (a) finalizing district plans and labour budget; and (b) monitoring and supervising at district level. | |
| District Programme Coordinator (DPC) | (a) ensuring that the scheme is implemented according to the Act at the district level; (b) information dissemination; (c) training; (d) consolidating block plans into a district plan; (e) ensuring that administrative and technical approval for projects are obtained on time; (f) release and utilisation of funds; (g) ensuring monitoring of works; (h) muster roll verifications; and (i) submitting monthly progress reports. | |
| State Employment Guarantee Council (SEGC) | (a) advising the state government on implementation; (b) evaluate and monitor implementation; (c) determining the "preferred works" to be taken up; (d) recommending the proposal of works to be submitted to the state government; and (e) prepare an annual report to the state legislature. | |
| State Government | (a) wide communication of the scheme; (b) setting up the SEGC; (c) setting up a State Employment Guarantee Fund; (d) ensuring that dedicated personnel are in place for implementation, including Gram Rozgar Sahayak, Programme Officer, and technical staff; (e) ensuring state share of the scheme budget is released on time; (f) delegation of financial and administrative powers to the DPC and Programme Officer if necessary; (g) training; (h) establishing a network of professional agencies for technical support and quality control; (i) regular review, monitoring, and evaluation of processes and outcomes; and (j) ensuring accountability and transparency. | |
| Central Employment Guarantee Council | (a) advising the central government on MNREGA matters; (b) monitoring and evaluating implementation of the Act; and (c) preparing annual reports on implementation and submitting them to Parliament. | |
| Ministry of Rural Development | (a) ensuring resource support to states and the CEGC; (b) regular review, monitoring, and evaluation of processes and outcomes; (c) maintaining and operating the MIS to capture and track data on critical aspects of implementation; (d) assessing the utilization of resources through a set of performance indicators; (e) supporting innovations that help in improving processes towards the achievement of the objectives of the Act; (f) support the use of Information Technology (IT) to increase the efficiency and transparency of the processes as well as improve interface with the public; and (g) ensuring that the implementation of NREGA at all levels is sought to be made transparent and accountable to the public.. | |
| Source: Operational Guidelines, National Rural Employment Guarantee Scheme, Ministry of Rural Development. | ||
Last week, oil-marketing companies (or OMCs, such as Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited) raised the price of domestic LPG in the country. [1] The price of a domestic cylinder (14.2kg) has increased from Rs 714 in January 2020 to Rs 858.5 in February 2020. This is a 20% hike in the price of a LPG cylinder. Note that this is the sixth consecutive month for which LPG prices have been revised upwards. Figure 1 shows the variation in price of a domestic (non-subsidised) LPG cylinder in Delhi over the last year.
Figure 1: Variation in price of non-subsidised domestic LPG cylinder
Sources: Indian Oil and Corporation Limited; PRS.
How is the price of LPG cylinders determined?
LPG prices are revised every month. The price is determined by public sector OMCs namely, Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited, in line with the changes in the international market prices and other market conditions. [2] The international market price affects the import parity price of petroleum products (the price that importers pay for import of product at the respective Indian ports). This includes exchange rate, ocean freight, insurance and customs duty among others.
The Ministry of Petroleum and Natural Gas has stated that the recent hike in the price of LPG cylinder is due to a sharp rise in international LPG prices during January 2020 (from USD 448/Metric Tonne to USD 567/Metric Tonne). [3]
What is the difference between the price of a subsidised and non-subsidised cylinder?
The price determined by the OMCs reflects the price of a non-subsidised domestic LPG cylinder. The government modulates the effective price to provide subsidised LPG cylinders to consumers under the 'Pratyaksha Hastaantarit Laabh' direct benefit transfer (or DBT-PAHAL) scheme. [4] Under the scheme, a consumer (with annual income of up to Rs 10 lakh) can avail DBT cash-subsidy for a LPG cylinder. The beneficiaries buy LPG cylinders at market rate and subsequently receive subsidy directly in their bank accounts.
With the recent increase in price of a LPG cylinder, the government has increased the subsidy amount for PAHAL consumers from Rs. 153.86 per cylinder to Rs. 291.48 per cylinder (89% increase).3 This is done to ensure that the subsidized LPG consumers are insulated from the volatility of LPG prices in the international market. Table 1 shows the amount of subsidy provided by the government for LPG cylinder. Note that price of a subsidised cylinder has increased from Rs 494 to Rs 567 (14.8%) from February 2019 to February 2020.
Table 1: Difference between the price of subsidised and non-subsidised LPG cylinder
|
As on |
Non-subsidised cylinder |
Subsidised cylinder |
Subsidy |
|
February 2018 |
Rs 736.00 |
Rs 495.63 |
Rs 240.37 |
|
February 2019 |
Rs 659.00 |
Rs 493.53 |
Rs 165.47 |
|
February 2020 |
Rs 858.50 |
Rs 567.02 |
Rs 291.48 |
Sources: Unstarred Question No.1211, February 13, 2019, Ministry of Petroleum and Natural Gas, Rajya Sabha.
Note: Prices are at Delhi.
How many people avail the subsidy on LPG cylinders?
Currently, there are a total of 27.16 crore LPG (domestic) connections in the country.3 Of these, 26.12 crore (94%) consumers are beneficiaries under the PAHAL scheme, and therefore, can avail LPG cylinders at subsidised rates. Note that, under the scheme, a maximum of 12 subsidised cylinders per year can be availed under one connection. Further, a household cannot have more than one connection.
What is the cost of subsidy for the government?
The subsidy on domestic LPG is met through the budgetary grants of the Ministry of Petroleum and Natural Gas. In 2020-21, the government is estimated to spend Rs 37,256 crore on LPG subsidy. This includes Rs 35,605 crore for DBT-PAHAL and Rs 1,118 crore for Pradhan Mantri Ujjwala Yojana. This is an increase of 9.3% from the expenditure in 2019-20 of Rs 34,086 crore (revised estimate). Note that LPG subsidy constitutes 87% of the Ministry's total budget (Rs 42,901 crore).
Figure 2 below shows the year-wise expenditure on LPG subsidy, and as a proportion of the total budget of the Ministry from 2015-16 to 2020-21.
Figure 2: LPG subsidy over the years (2015-16 to 2020-21).
Sources: Union Budget Documents; PRS.
For more trends and analysis related to the finances of the Ministry of Petroleum and Natural Gas, see here.
[1] "LPG price hiked by Rs 144.5 per cylinder", Economic Times, February 12, 2020, https://economictimes.indiatimes.com/industry/energy/oil-gas/lpg-price-hiked-by-rs-144-5-per-cylinder/articleshow/74096745.cms.
[2] Frequently Asked Questions (FAQ), Petroleum Planning and Analysis Cell, https://www.ppac.gov.in/content/137_3_Faq.aspx.
[3] "LPG Price is Derived based on International Market Price", Press Information Bureau, Ministry of Petroleum and Natural Gas, February 13, 2020.
[4] PAHAL-Direct Benefits Transfer for LPG (DBTL) Consumers Scheme, Ministry of Petroleum and Natural Gas, http://petroleum.nic.in/dbt/whatisdbtl.html.
