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In April last year the government had notified the Information Technology (Intermediary Guidelines) Rules, 2011 (IT Rules) under the Information Technology Act, 2000. The IT Rules are listed for discussion in Rajya Sabha today in pursuance of a motion moved by Mr. P. Rajeeve [CPI(M)]. The motion seeks to annul these Rules and recommends that Lok Sabha also concur with the motion. The IT Rules require intermediaries (internet service providers, blogging sites like Blogger and Wordpress, and cyber cafés) to take certain action. Intermediaries are required to enter into agreements with their users prohibiting publication of certain content. Content that cannot be published includes anything that is ‘harmful to minors in any way’, ‘blasphemous’, ‘encouraging money laundering’ etc. This raises three issues. Some of the categories of content prohibited for publication are ambiguous and undefined. For instance, ‘grossly harmful’ and ‘blasphemous’ content are not defined. Publication of certain content prohibited under the IT Rules, is currently not an offences under other laws. Their publication is in fact allowed in other forms of media, such as newspapers. Newspapers are bound by Press Council Norms. These Norms do not prohibit publication of all the content specified under the IT Rules. For instance, while these Norms require newspapers to show respect to all religions and their gods, they do not prohibit publication of blasphemy. However, under the IT Rules blasphemy is prohibited. This might lead to a situation, where articles that may be published in newspapers legally, may not be reproduced on the internet for example in the e-paper or on the newspaper’s website. Prohibition of publication of certain content under the IT Rules may also violate the right to freedom of speech. Under Article 19(2) of the Constitution restrictions on the right to freedom of speech may be imposed in the interest of the State’s sovereignty, integrity, security and friendly relations with other States, public order, morality, decency, contempt of court, and for protection against defamation. The content prohibited under the IT Rules may not meet the requirement of Article 19(2). This may impinge on the right to freedom of speech and expression. Further, anyone can complain against such content to the intermediary. The intermediary is required to remove content if it falls within the description specified in the IT Rules. In the event the intermediary decides not to remove the content, it may be held liable. This could lead to a situation where, in order to minimise the risk of liability, the intermediary may block more content than it is required. This may imply adverse consequences for freedom of expression on the internet. PRS’s detailed analysis of the IT Rules may be accessed here.
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.
