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.
In the last few years, several states have enacted laws to curb cheating in examinations, especially those for recruitment in public service commissions. According to news reports, incidents of cheating and paper leaks have occurred on several occasions in Uttarakhand, including during the panchayat development officer exams in 2016, and the Uttarakhand Subordinate Services Selection Commission exams in 2021. The Uttarakhand Public Service Commission papers were also leaked in January 2023. The most recent cheating incidents led to protests and unrest in Uttarakhand. Following this, on February 11, 2023, the state promulgated an Ordinance to bar and penalise the use of unfair means in public examinations. The Uttarakhand Assembly passed the Bill replacing the Ordinance in March 2023. There have been multiple reports of candidates being arrested and debarred for cheating in public examinations for posts such as forest guard and secretariat guard after the ordinance’s introduction. Similar instances of cheating have also been noted in other states. As per news reports, since 2015, Gujarat has not been able to hold a single recruitment exam without reported paper leaks. In February 2023, the Gujarat Assembly also passed a law to penalise cheating in public examinations. Other states such as Rajasthan (Act passed in 2022), Uttar Pradesh (Act passed in 1998) and Andhra Pradesh (Act passed in 1997) also have similar laws. In this blog, we compare anti-cheating laws across some states (see Table 1), and discuss some issues to consider.
Typical provisions of anti-cheating laws
Anti-cheating laws across states generally contain provisions that penalise the use of unfair means by examinees and other groups in public examinations such as those conducted by state public sector commission examinations and higher secondary education boards. Broadly, unfair means is defined to include the use of unauthorised help and the unauthorised use of written material by candidates. These laws also prohibit individuals responsible for conducting examinations from disclosing any information they acquire in this role. The more recent laws, such as the Gujarat, Uttarakhand, and Rajasthan ones, also include the impersonation of candidates and the leaking of exam papers within the definition of unfair means. Uttarakhand, Gujarat, Rajasthan, Uttar Pradesh, Chhattisgarh, and Andhra Pradesh prohibit the use of electronic aids. Maximum prison sentences for using such unfair means range from three months in Uttar Pradesh, to seven years in Andhra Pradesh.
Issues to consider
The Gujarat and Uttarakhand anti-cheating Acts have relatively stringent provisions for cheating. The Uttarakhand Act has a fixed 3-year prison sentence for examinees caught cheating or using unfair means (for the first offence). Since the Act does not distinguish between the different types of unfair means used, an examinee could serve a sentence disproportionate to the offence committed. In most other states, the maximum imprisonment term for such offences is three years. Andhra Pradesh has a minimum imprisonment term of three years. However, all these states allow for a range with respect to the penalty, that is, the judge can decide on the imprisonment term (within the specified limits) depending on the manner of cheating and the implications of such cheating. Table 1 below compares the penalties for certain offences across eight states.
The Uttarakhand Act has a provision that debars the examinee from state competitive examinations for two to five years upon the filing of the chargesheet, rather than upon conviction. Thus, an examinee could be deprived of giving the examination even if they were innocent but being prosecuted under the law. This could compromise the presumption of innocence for accused candidates. The Gujarat and Rajasthan laws also debar candidates from sitting in specified examinations for two years, but only upon conviction.
These laws also vary in scope across states. In Uttarakhand and Rajasthan, the laws only apply to competitive examinations for recruitment in a state department (such as a Public Commission). In the other six states examined, these laws also apply to examinations held by educational institutions for granting educational qualifications such as diplomas and degrees. For example, in Gujarat, exams conducted by the Gujarat Secondary and Higher Secondary Education Board are also covered under the Gujarat Public Examination (Prevention of Unfair Means) Act, 2023. The question is whether it is appropriate to have similar punishments for exams in educational institutions and exams for recruitment in government jobs, given the difference in stakes between them.
Sources: The Rajasthan Public Examination (Measures for Prevention of Unfair Means in Recruitment) Act, 2022; the Uttar Pradesh Public Examinations (Prevention of Unfair Means) Act, 1998; the Chhattisgarh Public Examinations (Prevention of Unfair Means) Act, 2008; the Orissa Conduct of Examinations Act, 1988; the Andhra Pradesh Public Examinations (Prevention of Malpractices and Unfair means) Act, 1997; the Jharkhand Conduct of Examinations Act, 2001, the Uttarakhand Competitive Examination (Measures for Prevention and Prevention of Unfair Means in Recruitment) Act, 2023, the Gujarat Public Examination (Prevention of Unfair Methods) Act, 2023; PRS.
