Rexjournal ISSN Renewable Research Journal

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1 TITLE: ALTERNATE SOURCE OF LIGHTING TO KEROSENE FOR RURAL HOUSEHOLDS Authors: Dharmendra Makwani, Dr. Gopalkrishnan Purushthaman Institute: Shri Jagdishprasad Jhabarmal Tibrewala University Paper Submitted for: National Conference on Challenges & Opportunities towards Clean & Green India 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 19 th century, the Miracle of Nature 1 - 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 underdeveloped 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. 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 Rexjournal Volume 3 Issue 2 Page 76

2 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 met by kerosene and liquefied petroleum gas (LPG) % 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 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) Million Tonnes Domestic Commercial/Industry Others Private Party Sales 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 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. 2 Pohekar, S.D, Kumar,D & Ramachandran, M, 2005, Dissemination of cooking energy alternatives in India- a review, Renewable and Sustainable Energy Reviews, 9, , retrieved from Year Rexjournal Volume 3 Issue 2 Page 77

3 Million Tonnes Figure 2 Domestic Production and Import of Kerosene (Million Tonnes) Years 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. The Kerosene Pricing and Subsidy Debate Production (000 MT) Import (000 MT) 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 /- 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 /- 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) At Import Parity Prices Rs /- 3 Rao 2012 Refinery Gate/ Sea Port 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 Rexjournal Volume 3 Issue 2 Page 78

4 Oil Marketing Companies At Discounted Prices- Rs /- (The retail Whole Sale Dealer selling price of PDS kerosene differs from state to state Source FPSs/KODs/Retailers due to the difference in each state s tax structure. Within state Ration Card Holders prices might Source - Rehman et al (2005) & TERI-IISD report (2012) Oil Co-ordination Committee makes state-wise monthly allocation STATE GOVERNMENT Food & Civil Supplies Authority of state government allocates quotas to wholesaler and retailer, supervises and monitors kerosene allocation and distribution 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 , 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 per litre 4. This subsidy is met through an oil pool mechanism 5 to partially compensate for gap on the subsidies given for diesel, kerosene and LPG as they form almost two-thirds of the total 4 Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG, August 2012, TERI- IISD, retrieved from Rexjournal Volume 3 Issue 2 Page 79

5 petroleum product consumption in the country 6. This eventually led to the main scheme for kerosene subsidization in India 7 : The PDS Kerosene and domestic LPG Subsidy Scheme 2002 coming into effect from 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 (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 $10 billion per year, despite undertaking price reform of fossil fuel in the last decade (Rao 2012). Since the government didn t allow increases in domestic prices for PDS kerosene, residential LPG, gasoline and diesel in line with the increasing international crude oil prices, the cost of subsidies increased more than 100 per cent between and (Shenoy 2010). Figure 3 shows the fiscal subsidy on kerosene. The total government subsidy bill on PDS kerosene and Domestic LPG in was Rs. 30 billion (US$ 1.13 billion) and the potential losses due to the 40% diversion of PDS kerosene at prices was Rs. 50 billion (US $ 1.13 billion). 10 Figure 3 - Fiscal Subsidy on Kerosene 6 Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG, August 2012, TERI- IISD, retrieved from 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 Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG, August 2012, TERI- IISD, retrieved from Rexjournal Volume 3 Issue 2 Page 80

6 Rs. in crores Years 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 kerosene 11. 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 products 12, the under recoveries of the OMC have increased significantly. Figure 4 shows the under recoveries to oil companies have grown which was Rs crores in to Rs crores in Figure 4 - Under Recoveries to Oil Companies Rupees in Crores Years Source- Petroleum and NG Statistics 2012 Report Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG, August 2012, TERI- IISD, retrieved from Rexjournal Volume 3 Issue 2 Page 81

7 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 According to the TERI-IISD Study, 2012, more than Rs crore (US $ 1.13 billion) of subsidies and under-recoveries were lost in 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 crore (US $ million) in as excise duties foregone. 13 Thus approximately only 60% (Our Economic Bureau 2005) of subsidized kerosene 13 TERI-IISD 2012 Rexjournal Volume 3 Issue 2 Page 82

8 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 sold 14. 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 Figure 5- Allotment of kerosene 14 Rexjournal Volume 3 Issue 2 Page 83

9 Million Tonns Years Source- UP Maharashtra West Bengal Bihar Gujarat Madhya Pradesh Tamil Nadu Karnataka Andhra Pradesh Rajasthan Similarly Figure 6 show the states with the highest Per Capita Allocations (PCA) from till Figure 6- Per Capita Allocations 20 Litres per person States Rexjournal Volume 3 Issue 2 Page 84

10 Source- 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 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 Percentage States Source Census, Provisional, Registrar General of India Figure 8- Percentage of Households using Kerosene for Lighting in Urban India Rexjournal Volume 3 Issue 2 Page 85

11 Percentage States Source Census, Provisional, Registrar General of India Figure 9- Percentage of Households using Kerosene for cooking in rural India Rexjournal Volume 3 Issue 2 Page 86

12 Percentage Years Source Census, Provisional, Registrar General of India Figure 10- Percentage of Households using Kerosene for cooking in urban India Rexjournal Volume 3 Issue 2 Page 87

13 Percentage States Source 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 Rexjournal Volume 3 Issue 2 Page 88

14 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. 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 Rexjournal Volume 3 Issue 2 Page 89

15 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 lamps in 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: 1. Energy Access and Energy Security % 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 /- 40 months payback Rs 1000/- 20 months payback Rexjournal Volume 3 Issue 2 Page months payback

16 Rs. 500/- Rs. 250/- 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 Empanelled Solar Study lamp kit supplier Rexjournal Volume 3 Issue 2 Page 91 Provides Solar Lamps

17 Thus the project is designed at three levels where IIT-Bombay will be facilitating and coordinating 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 year 15 ) o It will save nearly 36,000,000 litres of kerosene per year (Assuming 3 litres/month//family of kerosene 16 ) 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 ) o The project will invest US $ (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. 15 Report on the Study conducted by Project Team at the pilot project site in Madhya Pradesh, April-May 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 Rexjournal Volume 3 Issue 2 Page 92

18 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. 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 Rexjournal Volume 3 Issue 2 Page 93

19 Gangopadhyay, S., Ramaswami, B. & Wadhwa, W, 2005, Reducing subsidies on household fuels in India: how will it affect the poor? Energy Policy 33 (2005), , 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), Pollan, M, 2006, The Omnivore s Dilemma: A natural history of four meals, The Penguin Press, USA Rao, N.D, 2012, Kerosene subsidies in India: When energy policy fails as social policy, Energy for Sustainable Development 16 (2012) 35-43, Elsevier, retrieved from api.ning.com/files/.../rao2012kerosenesubsidiesinindia.pdf Rehman, I.H, Malhotra, P., Pal, C.R & Singh, P.B, 2005, Availability of kerosene to rural households: a case study from India, Energy Policy 33 (2005), , Elsevier. Shenoy, B.V, 2010, Lessons learned from attempts to reform India s Kerosene Subsidy, International Institute for Sustainable Development, Geneva, retrieved from Vishwanathan, B & Kumar, K.S.K, 2003, Cooking fuel use patterns in India: , Energy Policy 33 (2005), , Elsevier Kirit Parikh Committee Report on A viable and Sustainable System of Pricing of Petroleum Products, Government of India, retrieved from Fossil-Fuel Subsidy Reform in India: Cash Transfers for PDS kerosene and domestic LPG, August 2012, TERI-IISD, retrieved from Rexjournal Volume 3 Issue 2 Page 94

20 Annexure 1 Table - Prices of Kerosene (Rs/litre) after subsidies Year Price (Rs./litre) March September November Rexjournal Volume 3 Issue 2 Page 95

21 January June Source- Rexjournal Volume 3 Issue 2 Page 96