RISRISRIS Policy Briefs India: AddressingtheChallenges Fossil FuelSubsidyReformin climate changethelistofemergingdeveloping encourage wastefulconsumption.” medium terminefficientfossilfuelsubsidiesthat commit to…Rationaliseandphaseoutoverthe poverty, energy from suffering populations we on theseeffortsandrecognizingthechallengesof preventing adverseimpactonthepoorest.Building countries arereducingfossilfuelsubsidieswhile communiqué, theG-20Leadersnoted:“Many subsidies overthemediumterm.Intheir elimination ofinefficientandwastefuloilgas out anagreementbetweenthemembernationson 2009 atPittsburgh,wentastepfurther nations (whichincludeIndia),heldin24-25September communiqué oftherecentmeetingG20 progressively doawaywithfossil-fuelsubsidies.The shifting toalowcarbon-trajectorywouldbe further underscoredthatoneoftheprerequisitesfor and providingincentivesforrenewable,theWESS efficiency, massive infrastructure investment inenergy both thereportsemphasisedonenhancingend-use the alarmingfossil-fueldependentpath.Although climate anddevelopmentimperativedigressfrom urgency ofalowcarbonrevolutioninordertoalign (WESS) broughttotheforeimportanceand World(WEO) andthe EconomicandSocialSurvey boththeWorld Outlook Energy latestissuesof The 1. TheBackdrop Source: Figure 1:EnergySubsidyinNon-OECDCountries nttt fTransport Development, NewDelhi. Institute of hasbeenpreparedbyRanjan Bandyopadhyay, Dr. Kaushik PolicyThis Brief SeniorFellow,Asian RIS PolicyBriefs With theheightenedconcernssurrounding IEA, 2008. — Policy research toshapethe international development agenda arepreparedonspecificpolicy issuesforthepolicymakers. l

by thrashing 2 open competition. and structuralshifttoaregime ofderegulationand since 1998thesectorembarkedonagradualtransition Administered PricingMechanism(APM).However, operating inastateofcompleteprotectionunder and halfdecades(from1975to1997)thesectorwas petroleum sectorinIndiarevealsthatfornearlytwo In fact,acloselookatthepricingregimein refiners; marketingcompanies;andthegovernment. particularly thevulnerablesections;producers; involved inthematrix,suchasconsumers, interests ofvariousactorsandinterestgroups politico-economic factorsand(oft-contradictory) constantly influencedbymultiplicityofchallenging regime inoilsectorsinceitsveryinceptionhasbeen pricing regimeprevailinginthesector.The sector anditsvariationhasbeenintertwinedwiththe policy debateonremovingfossilfuelsubsidies. very sectorthathasbeenattheheartofinternational fuel subsidygoestotheoilsector.Thus,thisis fossil direct Indonesia. InIndiathelion’s share of after Iran,Arabia, Venezuela China,Saudi and Indiacomes subsidiesonoil, subsidy. of Interms Saudi Arabiaintermsofabsolutelevelfuel in Figure1,IndiacomesafterIran,Russia,Chinaand distribution acrossdifferentfuelsources.Asdepicted subsidies innon-OECDcountriesalongwiththeir Figure 1delineatesacomparativepictureoffuel We Now? 2. FossilFuelSubsidy:Whereare household fuelsforcookingandlighting. rural areasdoesnothaveaccesstoelectricityandclean thepopulationespecially in where thelion’s shareof poverty thatanemergingcountrylikeIndiaconfronts communiqué alsorecognisesthechallengesofenergy includes India.Interestingly, however, the fuel end-user(orconsumer)subsidyespeciallyonoil the scannerforprovidingsubstantialchunkoffossil countries thathavebeenincreasinglycomingunder Historically theelementofsubsidyonoil o 45January2010 No. 1 1 Leader’s Statement Driven by the concerns of vulnerability and a to the worse-off or worst-off (below poverty line) at the Pittsburgh rising international crude prices the government, the subsidy largely facilitated in saving the fuel cost Summit (www.pittsburghsummit. however, failed to carry out the proposed dismantling for the relatively affluent and a burgeoning urban gov/mediacenter/ of APM fully and four sensitive products continued middle class. The absence of quantity rationing in 129639.htm) to be subsidised and insulated from international LPG consumption further led to unabated increase 2 International Energy crude price rise. The products are: petrol (gasoline/ in its consumption in urban areas. LPG is also used Agency (2008), World motor spirit) and diesel (high speed diesel) that are as an automobile fuel but that is not subsidised. Energy Outlook, IEA, primarily used as automotive fuel; and LPG and Hence LPG cylinders designated for household use Paris. kerosene (superior kerosene oil) that are primarily used often gets diverted for automobile use resulting in 3 IOC-Indian Oil for household consumption. The subsidy on petrol safety hazard. Corporation Ltd., and diesel is implicit in nature and is being exercised HPC-Hindustan through price control. The subsidy on LPG and It has also been observed by a number of Petroleum Corporation Ltd., kerosene, which in the post-APM era came to be evaluation studies and reports of government BPC-Bharat known as ‘PDS Kerosene and domestic LPG Subsidy committees that the policy of giving kerosene at Petroleum Scheme’, is explicit in nature. However, both these subsidised prices under PDS to all consumers Corporation Ltd., IBP- Indo-Burma subsidies are primarily intended to benefit the regardless of their economic status resulted in Petroleum Ltd. consumers through reduced prices and are thus wastage, leakage, adulteration and inefficiency. The biggest use of PDS kerosene has been for the 4 essentially consumer subsidies. The government has The amount of adulteration of diesel resulting in more pollution subsidy for the first also decided to phase out the subsidy on PDS kerosene financial year 2002-03 and domestic LPG progressively. and GHG emission. immediately after the subsidy had been Moreover, the lion’s share (more than 70 per introduced was Under the ‘PDS Kerosene and domestic LPG calculated as the Subsidy Scheme’ subsidised kerosene is distributed cent) of the rural poor and more than 20 per cent difference between through the public distribution system (PDS) and of the urban poor, who are dependent on direct the cost price and the burning of fuel wood or biomass for cooking, issue price per selling subsidised domestic LPG is sold by distributors in unit. The issue price association with state-owned oil companies in India (see Table 1) remains largely untouched by the implies the invoice (IOC, HPC, BPC and IBP).3 The primary objective supply of subsidised domestic LPG, a cleaner fuel 5 price of the product of providing this subsidy by the government, while for cooking. The subsidy scheme thus largely failed ex-depot/bottling to expedite the access of rural population to this plant excluding state carrying out the process of dismantling of APM, was surcharge, excise to smoothen the process of transition to complete relatively cleaner form of energy for cooking and in duty, sales tax, local deregulation and to shield especially the poor and the process failed to eliminate their ‘energy levies and delivery poverty’. The burning of biomass in inadequately charges. In the next vulnerable consumers post-deregulation (i.e. post financial year, i.e. dismantling of APM), when the prices of petroleum ventilated houses of the poor leads to high indoor 2003-04, the subsidy products became market determined and the pollution; formation of harmful black carbon (or under this scheme soot); high emission of CO and has serious was allowed at two petroleum sector got exposed to the fluctuation in 2 third of the rate international crude and product prices under a new repercussions especially on the health of women prevailing during pricing mechanism founded on the principle of and children who largely remain indoor for cooking 2002-03. For the and other household chores. Furthermore the subsequent import parity. Although the government started to 4 dependence on firewood or biomass also fails to financial years, i.e. prune the subsidy in a phased manner , eventually it 2004-05, 2005-06 was compelled to backtrack and keep its phased provide relief to the poor and especially rural and 2006-07, the pruning on hold ostensibly due to the much larger women folks who usually travel long distances to subsidy was collect firewood from the forest. allowed at one interest of shielding the consumers from more third of the rate volatile international crude and products price scenario pertaining to 2002- and more frequent international spikes that were As for petrol and diesel, the pricing mechanism 03. (Source: had a historical built-in cross subsidy burden on Petroleum Planning occurring since 2004. This was also coupled with an and Analysis Cell apprehension of a huge political backlash. The petrol which was always used to keep the price of (PPAC); website: government eventually decided to continue the diesel artificially depressed. This was later www.ppac.org.in) subsidy till 2010. substituted by imposing a much higher excise duty on petrol. The consistent implicit assumption of 3. Arguments against Implicit and the government behind introducing asymmetry in Explicit Oil Subsidies in India: A the retail selling prices of petrol and diesel has been that petrol is the fuel of the relatively better off. Snapshot However, this price asymmetry has had the The main criticism that has been levelled against the unintended consequence of creating an incentive domestic LPG subsidy is that it is a universal or non- for motorists to opt for diesel rather than for merit subsidy. Hence, instead of catering specifically gasoline cars. As a result the number of diesel run

2 RIS Policy Briefs # 45 cars on the road increased substantially and diesel and marketing companies had been shouldering a 5 LPG is gradually became dominant in the Indian large part of it by not passing the full increase in the environmentally much more benign automotive fuel basket. international prices to the domestic consumer thereby as compared to incurring substantial under-recoveries. The under- other fossil fuels The report of the Working Group on petroleum recoveries started piling up especially during the like coal, petrol, 6 diesel and biomass and natural gas for the Eleventh Five Year Plan frequent oil price spikes since 2004. The companies and could very well recognises the fact and counters the implicit assumption could only partially recoup their losses on this count be considered as a behind introducing this asymmetry by asserting that after the onset of worldwide recession which led to transitory fuel for 71 per cent of non-transport vehicles are two wheelers, drop in both oil demand and prices. The government the poor in shifting from biomass based which run on petrol. The report mentions that country tried to partly assist the oil companies through cooking to cleaner has the highest population of two wheelers and is issuance of oil bonds but that could hardly make up non-fossil fuel and also growing at a much faster rate as compared to cars. for their huge under-recoveries and instead led to renewable source of energy which The report further mentions that these two wheelers additional wasteful transfer from India’s fiscal wealth would take essentially provide mobility to the aspiring class, the which could otherwise have been utilised for more sufficient time climbers and the middle class and not to the relatively productive purposes. before the cost of these fuels actually affluent sections. comes down 4. Remedial Measures and substantially and In other words, the report makes it crystal clear Alternate Government Schemes: A become accessible that the basic rationale for introducing the price Brief Review to the poor. differential does not seem to hold sufficient ground. 6 In view of the problems that have been brought out Government of The more recent B.K. Chaturvedi Committee report7 India (2006), Report further asserts that the only consideration for by plethora of evaluation studies and in keeping with of the Working Group on Petroleum and maintaining “significant price discrimination in favour the recommendations of number of committees that that were constituted from time to time to Natural Gas for the of diesel is that it creates positive externalities in the Eleventh Five Year deliberate on pricing of refined petroleum products case of public transport and the trucking industry Plan (2007-2012), or on the financial position of public sector oil Ministry of that carry people and goods, creating an extensive companies, the government had been undertaking petroleum and transport network, across the length and the breadth natural gas, New of the country”. However, the report points out that remedial measures in order to ensure that the subsidy Delhi, November. this logic does not seem to apply for passenger cars reach the poor and deserving beneficiaries. Some of those measures on kerosene and LPG are briefly and sports utility vehicles; it does not also apply for 7 Government of discussed below. substantial consumption of diesel by industrial units India (2008), Report and generators. of the High Powered Committee on Kerosene Financial Position of Furthermore, the government has been bearing The ministry of petroleum and natural gas (MoPNG) Oil Companies, only a minimal portion of both the explicit (on submitted to the has undertaken various technological and institutional Prime Minister, domestic LPG and kerosene) and implicit (on petrol measures to curb adulteration. Some of the recent New Delhi, August. and diesel) subsidies. The public sector oil refining measures taken by the ministry in the post-APM era (available at: www.infraline.com)

Table 1: Percentage of Households Using LPG and Kerosene as Primary Source of Energy

Year Rural Urban Firewood LPG Kerosene Firewood LPG Kerosene Cooking 1990/00 75.5 5.4 2.7 22.3 44.2 21.7 2000/01 75.4 7.2 2.4 21.0 47.4 19.4 2001/02 73.4 8.1 2.0 23.3 49.9 15.3 2002/03 74.3 8.5 1.6 21.2 51.2 14.8 2003/04 74.9 9.1 1.9 20.0 55.4 13.0 2004/05 75.7 9.0 0.9 21.5 56.4 10.4 2005/06 74.0 9.3 1.0 20.9 57.1 9.2 Lighting 1999/00 50.6 10.3 2000/01 47.8 9.0 2001/02 47.2 7.8 2002/03 47.4 8.3 2003/04 46.6 8.3 2004/05 45.6 7.0 2005/06 42.0 7.2 Source: GoI, 2008 (see footnote 7 for detailed reference). RIS Policy Briefs # 45 3 8 Based on answers are: 1) automation of retail outlets; 2) third party LPG resulting in substantial losses to them. As a provided by inspection and certification of retail outlets; 3) remedial measure the AP government introduced MoPNG to the Rajya Sabha direction to oil marketing companies (OMCs) for smaller 5kg LPG cylinders requiring an initial deposit Unstarred Question monitoring of movement of tank trucks through of Rs. 500 and a refill cost of Rs. 100 to Rs.150 with No. 672 (available at: global positioning system (GPS); 4) introducing the expectation that this would lead to higher http:// marker in kerosene to prevent adulteration; and 5) consumption of LPG especially by the rural poor and 164.100.47.5:8080/ members/Website/ revision of market discipline guidelines with penal would also reduce the losses of oil companies and the quest.asp?qref=121216) action against erring dealers.8 cost to government in terms of subsidies. The revised scheme is, however, yet to be adequately evaluated. 9 In order to assess the impact of Furthermore, a more refined version of PDS implementing JKP kerosene distribution called Jan Kerosene Pariyojana In order to prevent illegal LPG cylinder on distribution of (JKP) has been introduced in selected blocks of some diversions from the subsidised household sector PDS Kerosene, the Petroleum Planning states. Unlike the traditional system of distributing to the unsubsidised commercial sector the and Analysis Cell kerosene, delivery under JKP is made at wholesaler government also instituted random checks and raids (PPAC) points by OMCs through dedicated tankers fixed with in 2005-06 on the basis of widespread reports on commissioned a GPS.Under this scheme, OMCs have created illegal diversions. Inspectors were sent around the study to National Council of Applied infrastructure at wholesaler locations by providing country to monitor the monthly sales patterns of Economic Research underground tanks, dispensing units, specially LPG distributors and dealers to check if there had (NCAER) in 2007 to painted blue barrels and barred sheds.9 been any unusual distortions on account of these undertake impact assessment of JKP. illegal diversions. However, the action only had The impact A smart card scheme was also proposed on an temporary impact. The problem re-surfaced again assessment study experimental basis in three districts - Latur in afterwards in the cities where the government started found that while there has been Maharashtra, Nalanda in Bihar and Nainital in distributing LPG through pipelines resulting in improvement in Uttaranchal in 2007. In this pilot project, subsidised surplus LPG cylinders and leading to diversion. awareness of the kerosene was proposed to be made available to below kerosene poverty line (BPL) families while all other ration card In order to eliminate diversion of domestic LPG consumers about their entitlement holders would be given non-subsidised kerosene. to automotive sector, oil industry initiated measures and about the OMCs were supposed to ensure adequate availability like refill audit. Moreover, auto LPG dispensing monitoring and of PDS as well as non-subsidised kerosene during facilities have been set up in select areas to control complaint redressal mechanism entailed the entire period of implementation of the pilot pollution and to reduce or eliminate diversion of under JKP, the project. However, the Ministry encountered stiff domestic LPG to automotive sector. This measure benefit from JKP resistance from the aforesaid states as they wanted to has yielded results and auto LPG sales have gone up was still lower than the cost of the include above poverty line (APL) families as well. substantially over 2006 and 2007. The Government scheme, without However, MoPNG was opposed to the states’ idea also approved a scheme for different colour coding imputing savings as that would frustrate the very objective of of domestic and non-domestic cylinders to prevent from elimination of losses arising introducing the scheme. Thus, the pilot project itself diversion of domestic LPG cylinders. from diversion. had to be put on hold. The study further Furthermore, in 2006-07, MoPNG came out with revealed that while an initiative to sell LPG at market rates to people some states fared Domestic LPG better, others failed with permanent account number (PAN) cards issued primarily owing to One of the primary factors that impeded the access by the income tax department. However, the initiative a disparity in the of poor to LPG is the relatively high initial upfront also had to be scrapped due to stiff resistance. level of cost of getting a LPG connection. In order to do involvement of Panchayati Raj away with this problem a pro-poor LPG distribution The report of the Working Group on petroleum Institutions (PRIs) scheme intended primarily for poor women in rural and natural gas for the Eleventh Plan recommended in the monitoring 10 and urban areas called ‘Deepam Scheme’ had been that in order to encourage use of auto LPG, auto mechanism. launched by the state government of Andhra Pradesh NCAER (2007): LPG dispensing stations (ALDS) should be set up “Impact Assessment (AP) in 1998. Under the scheme the state government on priority basis in big towns which are not likely to of Jan Kerosene provides a subsidy of Rs. 1000 towards the connection receive CNG (compressed natural gas) in the short to Pariyojana”, report but does not subsidise the cost of a refill, which is submitted by medium term. NCAER to PPAC, more than Rs 250 for a 14kg cylinder. An assessment Ministry of of the scheme undertaken in 2001 indicates that the Two more measures are also under consideration petroleum and urban beneficiaries used much more LPG than rural by the Ministry: natural gas, New • Rolling back the scheme for distribution of Delhi. beneficiaries. Most of the rural households failed to afford cylinder refill and fire wood continued to remain subsidised LPG in every area where piped gas as primary fuel for cooking. In the process the oil connections are provided companies also failed to reach the targeted refill of • Drawing up a scheme for focused and direct

4 RIS Policy Briefs # 45 subsidization of LPG to consumers living in rural and excise duties on petrol and diesel four times. 10 The primary and backward areas which are not covered by piped From March 2005 onwards for petrol and diesel excise objectives of Deepam Scheme are: gas networks and thereby replacing their use of duties had been reduced from 30 per cent and 14 per 1) to provide relief subsidised kerosene. cent respectively to 8 per cent plus Rs. 13/litre and to to women from the 8 per cent and Rs. 3.25/litre while customs duties drudgery of Due to these measures subsidised LPG would were reduced from 20 per cent to 10 per cent for both cooking; 2) to more likely reach targeted people, instead of just improve their health; products. Again from March 2007 onwards the ad catering to middle class and more affluent sections of 3) to prevent health valorem component of excise duties on both petrol hazard; 4) to reduce society in urban areas. and diesel has been reduced from 8 per cent to 6 per dependence on forests for cent and the custom duties on both products were The Planning Commission also suggested in firewood; and 5) to reduced from 10 per cent to 7.5 per cent. From July 7, the Integrated Energy Policy that any surpluses in improve the 2009 onwards the basic excise duty on branded petrol environment by LPG cylinders that may arise on account of and diesel has been revised from 6 per cent plus Rs 5 felling of trees. introduction of piped gas could be supplied to rural (Available at: per litre and 6 per cent plus Rs 1.25 per litre to Rs 6.5 areas for cooking or lighting purposes to replace www.aponline.gov.in per litre and Rs 2.75 per litre respectively. In other -/Quick Links/ subsidised kerosene.11 words, the basic excise duty has been altered from a Representations/ Programmes/ combination of specific and ad valorem to specific However, the first measure may not be without deepam) duties. However, the state sales taxes on petrol and problems. It is quite obvious that due to expansion diesel could not be reduced concomitantly despite 11 Anupama Airy, of gas grids LPG distributors in urban areas would repeated requests from the central government to state ‘Double Benefit lose their business. Thus, concerns have also been troubles piped gas’, governments for doing so. The most important raised that the government might face strong resistance The Financial reason for states reluctance lies in the fact that these Express, August 19, which could even amount to sabotaging of the piped taxes and duties constitute major revenues for the 2008. gas network itself. central and state governments. In fact, in view of 12 Rajeev Jayaswal, India’s perverse social and economic challenges which ‘Unique Ids to For improved governance and better targeting vary regionally as well as state-wise, such an inelastic deliver goods from of items that include kerosene and LPG, the December 2009’, revenue source has always been considered as crucial government is planning to issue a unique The Economic Times, by the government both at the centre and state in identification (UID) to every citizen.12 In line with November 10, 2008. financing their policy objectives. Thus, rationalisation the suggestion given in the plan document of the of prices of these fuels also faces a really tough Eleventh Five Year Plan the subsidy amount would resistance and is indeed a great challenge. be directly credited to individuals with UIDs. The subsidy amount could be redeemed at authorized suppliers like fair price shops, kerosene or domestic 5. Ways Ahead LPG dealers, etc. According to the plan document, Subsidies may be justified in some cases as an the smart card would have a memory partitioned into instrument to combat poverty. However, they ought distinct modules representing different entitlement to be appropriately targeted, affordable and pro-poor, groups to whom subsidies are given. easy to administer, transparent and have an in built system of accountability. Besides, they should be able Petrol and Diesel to deliver quantifiable benefits in terms of increased Any discussions on pricing of petrol and diesel would welfare of the vulnerable sections of the population. be incomplete if one precludes the price distorting excise and customs duties and state level recoverable It is evident from the foregoing discussions in and irrecoverable sales taxes that are usually imposed sections 2, 3 and 4 that in India there is a strong case on these products. Much of the discrepancy between for doing away with universal price subsidies on the prices of petrol and diesel is attributed to these domestic LPG and kerosene and targeting it taxes. Considering Delhi as a benchmark, nearly 49 especially for the rural poor. Given the fact that cleaner per cent of the retail price of petrol and 25 per cent of renewable and non-fossil fuel energy resources the retail price of diesel are comprised of these taxes. would take sufficient time for being affordable and Thus, the prices of both petrol and diesel could be widely accessible for end-use, LPG and kerosene rationalised through rationalisation these taxes and could be considered as transitory fuels. The biggest duties rather than forcing the oil companies to bear problem, however, is to devise an effective subsidy the burden. A number of government committees mechanism for distribution of these fuels especially have also deliberated on this issue from time to time. in the context of a country like India with unique In view of the recommendations of these committees, diversity in challenges and interests involved, which since 1 April 2002 (i.e. post partial dismantling of are often contradictory to each other. Moreover, APM), the central government has reduced customs subsidies usually tend to be more effective in case

RIS Policy Briefs # 45 5 of energy services that are provided through fixed identification UID would also facilitate in launching networks like electricity, natural gas, etc. and are really the smart card system for kerosene as well, although challenging to devise in case oil products that are the initial pilot projects faced stiff resistance. freely traded and are difficult to target. As far as the pricing of petrol and diesel is Although the modified Deepam scheme, based concerned, there is clearly a need and there are scopes on distribution of 5 kg LPG cylinders and lower for more rationalisation and removing the asymmetry upfront costs, might lead to increased uptake of LPG that exists in the price of diesel and petrol. by rural poor, it may not be without challenges and may still not be able to capture the lowest rung of the It also needs to be underscored that given the rural and urban poor who would continue to use subsidy framework in India, it would be relatively freely available biomass and firewood as a main easier for the government to phase-down subsidies cooking fuel. The idea of unique identification UID, or remove price control when international crude which is already on its way to be introduced, is a key prices are on the lower side. This is because the subsidy instrument of good governance that would largely component could be pruned down more smoothly help the poor in enjoying the benefits of subsidised during the downturn without any price shocks to the fuel through smart cards that are being or would be consumers. This essentially was the programme of allocated to them. But such a governance oriented the government when international oil prices were measure alone would not be enough and essentially on the lower side but had to be kept on hold due to needs to be complemented with mass supply of price spikes afterwards. However, the Finance Minister efficient and cheap biomass based cook stoves and has recently proposed that government would soon increased use of biogas not only to reduce the get back to its proposed deregulation of the petroleum problem of emissions and black carbon but mainly sector and the first two products to fall in line would to combat the serious repercussions that continued be petrol and diesel. use of biomass by the lowest rung of rural poor (especially women and children) would have on their The recent agreement arrived at Pittsburgh by health. In this context, with the available affordable leaders of G20 nations, albeit political in nature, alternatives like biogas and efficient cook stoves for would invariably keep the pressure on developing biomass in place, making the poorer households countries like India to revert back to its proposed sufficiently aware of the health implications of using plan of progressive deregulation and phasing out biomass would also help in the uptake of these both the implicit and explicit subsidies on sensitive alternatives by modifying households’ requirements petroleum products in India. and demand orientation. Furthermore, it also needs to be kept in mind that any technological alternative However, it has clearly been evinced in the to freely available biomass would be widely adopted preceding section that the government has been only if the incremental costs are affordable and offset constantly trying to address the problems that arose by the tangible non-monetary benefits perceived by out of incomplete deregulation and has been making the user. In this context, the recent announcement by repeated effort towards creating a conducive atmosphere the government for producing cheap and efficient to carry out its proposed programme. In this light, it biomass based cook stoves in India on a large scale is also deserves to be mentioned that the timeline (post- indeed heartening. 2010) that the India government had already set domestically (much before the G20 meeting) for doing As far as kerosene is concerned, the JKY scheme away with LPG and Kerosene subsidy is rather way which is technologically more advanced than the usual ahead of what the G20 communiqué underscores on PDS kerosene distribution ought to be strengthened as medium term. Rather, the Indian government has a by a more stringent decentralised governance, delivery much bigger domestic challenge to stick to its own set and monitoring mechanism. Besides, the unique deadline for the sake of its own crucial interest. ***** — Policy research to shape the international development agenda — RIS Reports, Discussion Papers, Policy Briefs, New Asia Monitor and RIS Diary are available at RIS Website: www.ris.org.in Core IV-B, Fourth Floor India Habitat Centre Lodhi Road, New Delhi-110 003, India. Ph. 91-11-24682177-80 RIS Fax: 91-11-24682173-74-75 Research and Information System Email: [email protected] Websites: http://www.ris.org.in for Developing Countries http://www.newasiaforum.org

6 RIS Policy Briefs # 45