Rexjournal ISSN 2321-1067 Renewable Research Journal
Rex Journal Volume 3 Issue 4 Page | 180
TITLE: ALTERNATE SOURCE OF LIGHTING TO KEROSENE FOR RURAL
HOUSEHOLDS
Dharmendra Makwani, Dr. Gopalkrishnan Purushthaman
Shri Jagdishprasad Jhabarmal Tibrewala University
Abstract
Kerosene dominates the domestic sector primarily for lighting purposes in India. The current
price of domestic kerosene and the subsidies on the same have led to a financial burden on
the Indian economy and under-recoveries for Oil Marketing Companies (OMCs). The
subsidies have also led corruption and black-marketing of kerosene in remote rural areas,
resulting in many households not having access to any source of lighting. The denial to the
‘Right to Light’ has been primarily due to the historical allocations and use of kerosene in
India and the big rural-urban divide and income divide besides other factors that influence
local marketing of kerosene. Thus the subsidies have benefitted only the richer sections of
society which has failed the basic factor of equity of the kerosene subsidy policy. This paper
tries to show the financial burden and under-recoveries of kerosene subsidies and differential
use of kerosene in India while trying to show the significance of renewable energy projects
like the ‘1 Million Solar Urja Lamp (SoUL)’ Project that aims to provide the ‘Right to Light’
to every child in India.
1. Introduction:
A large variety of energy sources have been used for industrial, commercial and domestic
purposes globally. Traditionally, the oldest sources of energy used for domestic purposes of
lighting, cooking and space heating are biomass products like firewood, animal and
agricultural wastes. After the discovery of refined kerosene from crude oil in the 19th century,
the ‘Miracle of Nature1-Kerosene’ came to be widely used as one of the major source of
energy for commercial, industrial and domestic purposes of lighting and cooking. Kerosene
continues to dominate the domestic sector especially for lighting in the developing and under-
developed countries where electricity has been a distant reality. The supply of kerosene is
often subsidized in the developing and under-developed countries in an attempt to widen its
use as a convenient fuel (Gangopadhyay et al 2005) and enable equitable access to all classes
of society.
This paper tries to examine the kerosene prices and subsidies leading to a fiscal burden for
the country and under-recoveries for Oil Marketing Companies (OMCs), the differential use
of kerosene in India and a solar lamp intervention that can be more productive for rural
household lighting.
The domestic sector is one of the largest consumers of primary energy in India (nearly 40%
of total energy demand), and traditional sources still dominate in the house-hold sector,
where 75% of energy requirements are met by fuel wood and agricultural waste; the rest is
1 Michael Pollan in his book ‘The Omnivore’s Dilemma: A natural history of four meals’, 2006, The Penguin
Press, referred to bio-fuels and other fossil fuels and its products as the ‘Miracle of Nature’
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met by kerosene and liquefied petroleum gas (LPG)2. 68.84% of India’s population lives in
rural areas where 43.2% still use kerosene for lighting and 0.5% of rural households have no
access to lighting while 6.50% use kerosene for lighting in urban households (Census 2011).
Figure 1 shows the wide use of kerosene as a domestic fuel for lighting and cooking from
2006 to 2012. The usage in the commercial/industrial and other sectors has almost been
marginal thus indicating that kerosene has a high dependence and dominance only in the
domestic sector.
Figure 1 - Sector Wise Consumption of Kerosene (Million Tonnes- MT)
Source- Petroleum and Natural Gas Statistics 2012 Report
India imports most of its kerosene in order to meet the domestic kerosene demand. The
kerosene import peaked in 1998-1999 and then declined rapidly. The decline in the imports
is met with domestic production of kerosene in the country. Figure 2 shows the import and
domestic production of kerosene.
Figure 2 – Domestic Production and Import of Kerosene (Million Tonnes)
Source- Planning and Analysis Cell, Ministry of Petroleum and Natural Gas
India’s production of domestic kerosene has increased but at a decreasing rate to meet the
domestic demand primarily for rural household lighting.
2 Pohekar, S.D, Kumar,D & Ramachandran, M, 2005, ‘Dissemination of cooking energy alternatives in India- a
review’, Renewable and Sustainable Energy Reviews, 9, 379-393, retrieved from
http://www.sciencedirect.com/science/article/pii/S1364032104000632
2006-07 2007-08 2008-09 2009-10 2010-11 2011-2012
Domestic 9203 9163 9131 9101 8722 8045
Commercial/Industry 50 185 43 69 67 61
Others 159 17 128 134 139 123
Private Party Sales 93 0 0 0 0 0
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Mil
lion
Ton
nes
Year
05000
1000015000
199
8-9
9
199
9-0
0
200
0-0
1
200
1-0
2
200
2-0
3
200
3-0
4
200
4-0
5
200
5-0
6
200
6-0
7
200
7-0
8
200
8-0
9
200
9-1
0
201
0-1
1
201
1-1
2
201
2-1
3
Mil
lio
n T
on
nes
Years
Production (000 MT)
Import (000 MT)
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2. The Kerosene Pricing and Subsidy Debate
Globally, subsidies have been given on fossil fuels especially domestic fuels like kerosene for
poorer households to meet their lighting and cooking requirements. These subsidies are often
justified as instruments of redistribution in many developing countries, in part because of the
lack of broad-based institutions that enable direct cash transfer (Piketty and Qian, 2009) 3 or
access to grid connectivity.
The kerosene subsidy in India was initially established as a distribution scheme during fuel
shortages in World War II and after the war, the subsidy was maintained with the intention of
stabilizing prices and providing poor households with sufficient fuel for cooking and lighting
(Shenoy 2010). Subsidies are given for kerosene by the Ministry of Petroleum and Natural
Gas while the distribution is administered by the Ministry of Consumer Affairs, Food and
Public Distribution through the Food and Civil Supplies Authority in each state which is
finally given through the Public Distribution System (PDS). The OMCs import kerosene at
Rs. 47.31/- per litre and a subsidy of Rs. 0.82/- is given by the Central Government and thus
the final selling price of subsidized kerosene at the Public Distribution Shop (PDS) is Rs.
14.96/- which varies from state to state and across districts as it incorporates transportation
cost due to the distance factor. Thus in many remote villages, the subsidised price of kerosene
is Rs. 20/-. Chart 1 gives a diagrammatic representation of the hierarchical flow of kerosene
in India both administrative and subsidy wise.
Chart 1-Flow of Kerosene- India (Administrative and Subsidy Wise)
Source
3 Rao 2012
CENTRAL GOVERNMENT
MoPNG allocates state-wise
kerosene quotas
Fixes prices and subsidy
The Department of Food & Public
Distribution of the Ministry of
Consumer Affairs, Food and Public
Distribution administers the system
Refinery Gate/ Sea Port At Import
Parity Prices –
Rs. 47.31/-
Oil Marketing Companies At
Discounted
Prices- Rs.
14.96/-
(The retail
selling price
of PDS
kerosene
differs from
state to state
due to the
difference in
each state’s
tax
structure.
Within state
prices might
differ due to
transportatio
n costs
which are
passed on to
the
consumers)
Whole Sale Dealer Oil Co-ordination Committee makes
state-wise monthly allocation
FPSs/KODs/Retailers STATE GOVERNMENT
Food & Civil Supplies Authority of state
government allocates quotas to wholesaler and
retailer, supervises and monitors kerosene allocation
and distribution Ration Card Holders
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Source - Rehman et al (2005) & TERI-IISD report (2012)
After World War II and Indian Independence, the subsidies for food and domestic fuel like
kerosene stayed as political pressure forced each government to increase the portion of
subsidy to fuels meant to achieve an equitable distribution of essential consumer goods to
people all across the country (Shenoy 2010).
The kerosene subsidies in India post World War II have varied based fluctuating global oil
prices and following price mechanisms:
From 1976-2002, petroleum product prices were fixed by the government-constituted
Oil Pricing Committee based on the Administered Pricing Mechanism (APM) where
the oil companies were guaranteed a minimum rate of return and kerosene was cross-
subsidized by higher-priced petrol, diesel and other products and OMCs were able to
earn a reasonable rate of return on assets employed (Shenoy 2010).
In 2002, the Government of India announced the dismantling of the APM in the
Petroleum Sector and a fixed per-unit fiscal subsidy on PDS kerosene was set at Rs.
0.82 per litre4. This subsidy is met through an oil pool mechanism5 to partially
compensate for gap on the subsidies given for diesel, kerosene and LPG as they form
almost two-thirds of the total petroleum product consumption in the country6. This
eventually led to the main scheme for kerosene subsidization in India7: ‘The PDS
Kerosene and domestic LPG Subsidy Scheme 2002’ coming into effect from 2003.
In 2003, the government started to once again intervene in fuel-pricing decisions
when crude oil prices rose above US $ 60 per barrel and disallowed a cost overtake
by the OMCs (Chaturvedi 2008). 8
However, despite changes in the pricing policies in respect to changes in global fuel prices,
the price of subsidised PDS kerosene has remained unchanged since March 20029 (Refer to
Annexure 1- Prices of Kerosene after subsidies). However, due to government intervention in
the subsidization of kerosene along with the prices of kerosene there has been a huge subsidy
burden on the nation. According to the International Energy Agency (IEA), India is among
the highest of the non-OECD subsidizers of energy consumption, with subsidies of over $10
billion per year, despite undertaking price reform of fossil fuel in the last decade (Rao 2012).
Since the government didn’t allow increases in domestic prices for PDS kerosene, residential
LPG, gasoline and diesel in line with the increasing international crude oil prices, the cost of
subsidies increased more than 100 per cent between 2005-06 and 2008-09 (Shenoy 2010).
4Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG’, August 2012,
TERI-IISD, retrieved from http://www.iisd.org/gsi/sites/default/files/ffs_india_teri_rev.pdf 5http://petroleum.nic.in/subsidy.htm 6‘Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG’, August 2012,
TERI-IISD, retrieved from http://www.iisd.org/gsi/sites/default/files/ffs_india_teri_rev.pdf 7 http://petroleum.nic.in/subsidy.htm- As per the scheme, a flat rate of subsidy per selling unit is to be given to
the Public Sector Oil Marketing Companies (OMCs) equal to the difference between the cost price and issue
price per selling unit as on 31/2/2002. The OMCs were to adjust the retail selling prices (RSP) of these products
in line with international prices. The amount of subsidy per selling unit is equal to the difference between the
cost price (Cost price for PDS kerosene for any depot has been calculated on import parity basis, taking into
account international prices prevailing during March 2002) and the issue price (issue Price means the invoice
price of the product ex-depot excluding state surcharge, excise duty, sales tax, local levies and delivery charges)
per selling unit and is computed ex-depot price for PDS Kerosene. The subsidy is to be phased out in 3-5 years
as decided by the Government after consultation between the Ministry of Petroleum and Natural Gas and the
Ministry of Finance 8 Shenoy 2010 9 http://petroleum.nic.in/subsidy.htm
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Figure 3 shows the fiscal subsidy on kerosene. The total government subsidy bill on PDS
kerosene and Domestic LPG in 2011-12 was Rs. 30 billion (US$ 1.13 billion) and the
potential losses due to the 40% diversion of PDS kerosene at 2005-06 prices was Rs. 50
billion (US $ 1.13 billion).10
Figure 3 - Fiscal Subsidy on Kerosene
Source- Petroleum and NG Statistics 2012 Report
In addition to the government subsidy, the OMCs are sharing the burden of subsidizing PDS
Kerosene and the subsidy under the scheme is provided on the sales made by the participating
companies of kerosene under the PDS kerosene11.
Even though the fiscal subsidies are very small and on a decline as indicated in the above
graph, when compared with the gap between the selling and cost prices of the products12, the
under recoveries of the OMC have increased significantly. Figure 4 shows the under
recoveries to oil companies have grown which was Rs. 19485 crores in 2010-11 to Rs 27352
crores in 2011-12.
Figure 4 - Under Recoveries to Oil Companies
10 Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG’, August 2012,
TERI-IISD, retrieved from http://www.iisd.org/gsi/sites/default/files/ffs_india_teri_rev.pdf 11 http://petroleum.nic.in/subsidy.htm 12‘Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG’, August 2012,
TERI-IISD, retrieved from http://www.iisd.org/gsi/sites/default/files/ffs_india_teri_rev.pdf
0
500
1000
1500
2000
2500
3000
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Rs.
in
cro
res
Years
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Source- Petroleum and NG Statistics 2012 Report
Several reforms has been attempted at in order to stabilize the increasing burden of the
subsidy on the fiscal exchequer. These reforms have failed due to the strong political pressure
to maintain the subsidies exerted by the poor who still have some access to the cheaper
kerosene and by the participants in the black market (Shenoy 2010). Due to the increasing
cost of subsidies on the government and OMCs, a number of expert committees (Chaturvedi
2008 and Parikh 2010) commissioned by the Indian government in the past have
recommended phasing out the kerosene subsidies and replacing them with alternative subsidy
mechanisms (Rao 2012). The Kirit Parikh Committee Report (2010) stated that since the
kerosene subsidy is going largely for lighting, the allocations should be reduced as more and
more Below Poverty Line (BPL) households are connected to the electricity grid.
In argument to the reduced subsidies, Gagopadhyay et al (2005) in their study state that
though kerosene subsidy is an inefficient means of subsidizing fuel use for the poor, the
impact of reducing energy subsidies and its welfare on the poor will be enormous as
reduction in the subsidies will need to be supported by other policies that would limit the
adverse impacts. The authors conclude by stating that subsidy is a good instrument for fuel
transition from biomass to fossil fuels as it reduces deforestation and indoor air pollution.
However, the Kirit Parikh Committee Report states the alternatives to biomass and the
subsidies of fossil fuel especially kerosene can be reduced by the development of LED lights,
LED lanterns using ordinary dry cells that provide an alternative to lighting in rural areas.
These technological advancements are at comparable costs to what households spend on
subsidized kerosene which provides better light and as manufacturers make these lanterns
available across the country, the need for kerosene for lighting will reduce.
Thus kerosene as a source of lighting and the subsidies on the same has been debated on the
following points:
The growing fiscal subsidies and under-recoveries are leading to a fiscal burden on
the national exchequer
Subsidies are an inefficient means of ensuring fuel and energy access
Subsidies have come to become permanent and lead to corruption (Shenoy 2010)
thus leading to households not receiving the desired quantity of subsidised kerosene
Reduction in subsidies will lead to many households not having access to any source
of lighting
0
5000
10000
15000
20000
25000
30000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Ru
pee
s in
Cro
res
Years
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According to the TERI-IISD Study, 2012, more than Rs. 5000 crore (US $ 1.13 billion) of
subsidies and under-recoveries were lost in 2005-2006 and assuming that all the PDS
kerosene diverted towards ‘non-household use’ was used for the adulteration of diesel, the
state government would have lost an additional Rs. 1021 crore (US $ 230.61 million) in
2005-06 as excise duties foregone.13 Thus approximately only 60% (Our Economic Bureau
2005) of subsidized kerosene reaches the PDS customers and the remainder is diverted to the
black market where the diversion of kerosene is a lucrative business for corrupt fuel
distributors who in turn, bribe government officials to obtain licenses to distribute or blend
the fuel and to maintain the subsidy policy (Shenoy 2010). On field studies and observations
conducted by the authors in the states of Madhya Pradesh and Maharashtra, show that the
black market prices of kerosene per litre are Rs. 40/-. Thus the basis on which the subsidy
policy of kerosene is based –‘Equitable Distribution’ remains a mere utopian dream of the
policy makers and a distant reality for kerosene users. The subsidy has led to wasteful use of
energy and a lucrative business for many, thus leaving a large majority of the population
without an access to a basic source of energy and denying many poor households the ‘Right
to Light’.
Thus this section looked at the subsidy and pricing issue in India has led to certain problems
of fiscal burden and recurring losses along with lack of transparency in the distribution of
kerosene. The next section will examine the differential use of kerosene in India with respect
to allocations and use of kerosene in India.
3. The Differential Use of Kerosene
Literature and data analysis show that kerosene distribution and access has been
differentiated on various grounds. This section tries to look at some of these features in detail.
State wise allotment and use of kerosene
Kerosene Allocations to states have been given on a historical basis. The quantity of PDS
Kerosene on which subsidy is allowed for each states are limited to the allocations made by
the Ministry of Petroleum and Natural Gas subject to actual quantities sold14. The allocation
of PDS kerosene to the consumer with a ration card depends on whether the consumer has
LPG connections and this allotment differs from state to state.
Thus we notice that allotments to states differ despite the fact that some states have higher
poverty levels and other socio-economic differences that classify them as backward. Figure 5
shows the top ten states with the highest allotment of kerosene from 2008-2012.
Figure 5- Allotment of kerosene
13 TERI-IISD 2012 14 http://petroleum.nic.in/subsidy.htm
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Source- http://www.infraline.com/ong/petroproducts/SKO_PDS1.aspx
Similarly Figure 6 show the states with the highest Per Capita Allocations (PCA) from 2008-
09 till 2011-12
Figure 6- Per Capita Allocations
Source- http://www.infraline.com/ong/petroproducts/SKO_PDS1.aspx
The states and union territories shown in Figure 5 and 6 are relatively progressive compared
to the other backward states that don’t feature on this list thus indicating that the criteria of
allocations is more biased towards progressive states or states that may have good access to
other forms of energy. Thus the states with the highest usage of kerosene also depend on the
0
200000
400000
600000
800000
1000000
1200000
1400000
2011-12 2010-11 2009-10 2008-09
Mil
lio
n T
on
ns
Years
UP
Maharashtra
West Bengal
Bihar
Gujarat
Madhya Pradesh
Tamil Nadu
Karnataka
Andhra Pradesh
Rajasthan
0
5
10
15
20
25
Lit
res
per
per
son
States
2011-12
2010-11
2009-10
2008-09
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allotment of kerosene. The following figures show the top ten states in the country where the
percentage use of kerosene for lighting and cooking in rural and urban households
respectively is the highest.
Figure 7- Percentage of Households using Kerosene for Lighting in Rural India
Source- 2011 Census, Provisional, Registrar General of India
Figure 8- Percentage of Households using Kerosene for Lighting in Urban India
Source- 2011 Census, Provisional, Registrar General of India
0.002.004.006.008.00
10.00
Per
cen
tag
e
States
0.00
0.10
0.20
0.30
0.40
0.50
0.60
Per
cen
tag
e
States
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Figure 9- Percentage of Households using Kerosene for cooking in rural India
Source- 2011 Census, Provisional, Registrar General of India
Figure 10- Percentage of Households using Kerosene for cooking in urban India
0.00
0.02
0.04
0.06
0.08
0.10
0.12
Per
cen
tag
e
Years
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Source- 2011 Census, Provisional, Registrar General of India
Thus the use and allotment of kerosene shows a bias political and economic agenda of the
subsidy policy towards progressive states rather than states which are backward and remote.
Figures 7 and 8 show that backward and remote states like Orissa, Assam and Jharkhand have
a low percentage of households using kerosene for lighting compared to states like Uttar
Pradesh which is the highest. Similarly Figures 9 and 10 indicate that progressive states like
Tamil Nadu, Maharashtra and Gujarat have higher percentage of households using kerosene
for cooking than states like West Bengal, Rajasthan and Bihar. This allotment of kerosene
and its subsidy has led to various debates on the differential and undue use of kerosene. The
following points have been raised by researchers with respect to the same.
The historical basis of the allocations and usage by relatively richer states in the country
and low coverage for the poorer states in the country is noticed especially in the case of
kerosene used for cooking. The Chaturvedi Report 2008 stated that though there are large
increases in access to electricity, the allocation of kerosene has remained essentially the
same over the years. For example, 24% of rural kerosene consumption goes to states that
have achieved 100% electrification and thus presumably do not need the fuel for lighting
(Shenoy 2010).
The basis of subsidy allocation to the PDS card holder for cooking and lighting has been
also been contested by many. Rehman et al (2005) examined the issues of access and
availability of kerosene to rural masses and showed that the allocation of kerosene and its
subsidy is flawed in India where kerosene is given on the basis of the amount of cooking
fuel as household consumes (in the case of LPG) even though kerosene is used for
lighting. Thus the authors point out that a poorer household may have LPG for cooking
but no electricity for lighting and conclude that allocations should be based on a demand
basis or relative poverty levels of the states since in rural areas kerosene is mostly used
for lighting whereas in the urban areas it is largely used for cooking.
0.00
0.10
0.20
0.30
0.40
0.50
0.60P
erce
nta
ge
States
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The rural-urban bias of kerosene subsidy allocations has been debated for a long time.
Gangopadhyay et al (2005) state in their paper that the subsidies for modern fossil fuels
are biased towards the urban sector especially in the case of kerosene and in spite of the
subsidies there has been a small shift from biomass in the rural areas. As kerosene
subsidy is regressive in rural areas and progressive in urban areas, data on kerosene
subsidies shows that urban sector receives a larger subsidy and the limited availability of
subsidized kerosene in rural areas is biased towards lighting than cooking (Gagopadhyay
et al 2005). Rao (2012) states that in urban areas, the coverage of the poor is relatively
low but the materiality of subsidies is higher and the black market purchases represent a
higher share of total consumption thus making subsidies progressive where their removal
could be costly for particular urban groups that have few alternative cooking fuels.
Thus the differential allotment and use of kerosene has led to certain issues on the following
points that have been debated by researchers and policy makers on why kerosene subsidies
have led to a differential allotment and usage patterns:
The basis of the historical allocations and use of kerosene in progressive states that
have access to other sources of energy.
The rural-urban divide and the class divide on the basis of income have show that
subsidies have benefited the richer sections of society thus raising an important
question on the equity basis of distribution of the kerosene subsidy policy.
3. Solar Lamp Intervention
The kerosene subsidy given for lighting and cooking and its differential use patterns and
irregular distribution to end users through the PDS have created opportunities for other
alternatives to be introduced in rural areas where energy access has been a major problem.
Alternate sources of energy like solar have been looked at globally in order to provide
suitable lighting to rural households. The 1 Million Solar Urja Lamps (SOUL) is one such
initiative started in India that looks at reducing the use of kerosene in rural areas through the
distribution of solar lamps to school children. The objectives of the project are particularly
aimed at
Addressing the energy security scenario in the country especially with relation to
increasing crude oil prices and decreasing fossil fuels resources that are used for
lighting.
Enhancing education among school children who can use the lamps to study during
the night
Localising the assembly, servicing and usage of solar products in rural areas.
A pilot project ‘One Child One Light’ was carried out in Khargone District, Madhya Pradesh
where 19009 lamps in 2012-2013. The pilot project led to a bigger impetus to spread the
‘Right to Light’ to 1 million children across India. The project aims at distributing 1 million
lamps over a period of two years across the country and the focus is on the backward states.
The ‘SOUL Project’ aims to address the following development challenges in the country:
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1. Energy Access and Energy Security- 43.16% of India’s total rural households still depend
on kerosene for lighting (Census of India 2011) while 11 lakh households in India have
no source of lighting (Census of India 2011).
2. Education- Around 68.84% of India’s population resides in rural India (Census of India
2011) with 29.67% in the age group of 0-14 years. The use of solar lamps will guarantee
the ‘Right to Light’ to all children along with the Government of India’s proclaimed
motto on the ‘Right to Education’
3. Economy- Kerosene is a subsidised fuel in India creating a huge fiscal burden on the
Indian government with mounting under-recoveries for the Oil Marketing Companies.
The distribution of solar lamps will save the government foreign exchange and enhance
local livelihoods in the renewable sector
4. Environment- the uses of new forms of renewable energy like solar energy would help in
meeting environmental challenges faced by the country.
Project Innovations and Impacts
The innovations of the ‘SOUL Project’ are classified on the basis of cost and implementation
strategy which are described below:
The payback period of the lamp is estimated with respect to kerosene prices for each
household taken as 3 litres of kerosene per month at Rs. 18/- per litre. Thus taking the typical
cost of solar lamps and the relative payback period of the lamps with respect to kerosene, we
get the following diagram
Rs. 2000 /-
Rs 1000/-
Rs. 500/-
Rs. 250/-
40 months payback
20 months payback
10 months payback
5 months payback
2.5 months payback
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Rs. 125/-
As seen in the pilot project of the ‘1 Million Project’ in Madhya Pradesh, the cost barrier in
the range of less than 3- 6 months is acceptable for a rural community. Thus the final
subsidised price of the lamps has been kept at Rs. 120/-
o Implementation Strategy
The implementation of the project looks primarily at the decentralisation of assembly, sale,
repair and maintenance appropriate for small power devices (as in the case of the lamp)
ensuring local control and retention of benefits at the local level. In order to address the
equity and access issue of energy sources, districts and talukas (Blocks) in selected states
have been selected on the parameters of ‘Doability’ (NGO presence, total population and
total schools) and ‘Social Need’ (ST and SC population, literacy rate and electrification of
households). The implementation process and feasibility will be monitored and evaluated by
a research component incorporated in the project where IIT-Bombay will be associating with
Academic Institutions to conduct the baseline, impact and feasibility studies throughout the
project.
The following chart shows the model of lamp distribution based on the above stated
parameters.
Chart 3- Model of Lamp Distribution
Thus the project is designed at three levels where IIT-Bombay will be facilitating and co-
ordinating institute of the project while local level Partner Institutes (NGOs) will work at
ground level to ensure effective and efficient lamp distribution and local Academic Institutes
will be used for monitoring and evaluation of lamp distribution.
The ‘SOUL project’ is estimated to have the following impacts:
o It will provide 3,00,000,000 extra study hours per year (Assuming one extra study hour
per day, for 300 days in a year15)
15 Report on the Study conducted by Project Team at the pilot project site in Madhya Pradesh, April-May 2013
Provides Solar Lamps
Empanelled Solar Study lamp kit supplier
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o It will save nearly 36,000,000 litres of kerosene per year (Assuming 3
litres/month//family of kerosene16)
o It will save 1,00,000,000 kg of CO2 emissions (Assuming 1 litre of kerosene burning
emits about 2.5 kg of CO2)
o It will save US $ 26,000,000 of foreign exchange to the government (Assuming
government spends about Rs. 40 per litre to subsidize kerosene, assuming the US $ 1=
Rs. 5517)
o The project will invest US $ 162680 (Rs. 10 million) for training of local population to
enhance the localisation of the project
Conclusion
43.2% of India’s rural population still use kerosene for lighting while 0.5% has no access to
lighting (Census 2011). As seen in the above discussion on the kerosene prices and subsidies
that has led to a fiscal burden for the country and under-recoveries for OMCs along with not
achieving the purpose of equitable access and distribution leading to a differential use of the
resource among states and within rural and urban areas. Thus the 1 Million SoUL project
aims to address the ‘Right to Light’ to every child in a more practical and equitable approach.
The large scale national project and social endeavour has been built on objectives primarily
relating to the kerosene debate of subsidies, equity in distribution and access to better forms
of energy. It is observed and believed that the project will:
Try to ensure access to ensure light to remote rural areas that have depended solely on
kerosene for lighting purposes or don’t have access to energy for lighting whatsoever.
Thus the whole debate on kerosene subsidies, equity in allocations and distributions is
trying to be addressed by this large-scale project through the use of a cleaner and
alternate source of energy
Ensuring that education in rural areas is not disrupted due to inaccessibility of lighting
services is one of the noble objectives of the project. Thus the project has a twin
approach of addressing the education need as well as the lighting need of rural areas.
The concept of localisation of solar energy has been tried and tested in many parts of
the globe however, not on such a large scale. Thus employment generation and skill
development at local levels is going to be one of the key successes to the effective and
efficient implementation of the project
The project being carried out on such a large and massive scale is going to encounter
challenges related to:
Co-ordination with large number of stakeholders at different levels with respect to
common bottle-necks that all large projects encounter
Technical problems at ground level that many a times cannot be addressed due to the
factors of distance, time and local skill and knowledge to address new technology
alternatives.
16 According to the rules set by the Public Distribution System in India, Ministry of Consumer Affairs, Food and
Public Distribution, different card holders (distinguished on the basis on income) get different allocations of
kerosene per month. An average of 3 liters/month/family is taken in this case 17 http://ppac.org.in/writereaddata/Price%20Build%20up%20Sensitive%20Products.pdf
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The subsidy given to students for the lamps could be taken over by local vested
interests at all levels of the project.
The new concept of ‘Academic Social Responsibility’ has been applied to this project
where local academic institutes will be used as partners to monitor and evaluate the
project and carry on the later functioning of lamp distribution at local levels is a huge
task that requires co-ordination and support from many stakeholders to ensure that
monitoring and evaluation of the project is undertaken in an effective manner.
The success of the project will ensure that new forms of localised alternate energy gains an
entry to remote rural areas thus ensuring that the ‘Right to Light’ is accessible by all while it
is envisioned that the use of ‘Miracle of Nature-Kerosene’ is reduced by the entry of this
alternate source thus ensuring a reduced fiscal burden on the Indian exchequer while at the
same time making an easy and equitable access and distribution of localised energy forms.
References
Gangopadhyay, S., Ramaswami, B. & Wadhwa, W, 2005, ‘Reducing subsidies on
household fuels in India: how will it affect the poor?’ Energy Policy 33 (2005), 2326-
2336, Elsevier
Pohekar, S.D, Kumar, D & Ramachandran, M, 2004, ‘Dissemination of cooking energy
alternatives in India- a review’, Renewable and Sustainable Energy Reviews 9 (2005),
379-393
Pollan, M, 2006, The Omnivore’s Dilemma: A natural history of four meals, The Penguin
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Annexure 1
Table - Prices of Kerosene (Rs/litre) after subsidies
Year Price (Rs./litre)
1989 2.25
1990 2.77
1991 2.52
1992 2.52
1993 2.52
1994 2.52
1995 2.52
1996 2.52
1997 2.52
1998 2.52
1999 2.52
March 2000 5.55
September 2000 8.35
November 2000 7.35
2001 7.35
2002 8.98
2003 9.01
2004 9.01
2005 9.08
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2006 9.09
2007 9.16
2008 9.22
2009 9.22
2010 9.22
January 2011 12.32
June 2011 14.83
2012 14.96
2013 14.96
Source-http://in.reuters.com/article/2010/02/04/india-fuel-prices-idINSGE6130E720100204
http://in.reuters.com/article/2013/08/31/india-fuel-prices-idINL4N0GW05020130831