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Data: Compared to 2019-20, Market Borrowings of the Central Government More than Doubled - FACTLY
Sai Krishna Muthyanolla
September 28, 2023
The RBI’s annual ‘Handbook of Statistics on the Indian Economy’ offers an extensive collection of macroeconomic and financial data related to national income, production, pricing, currency, banking, financial markets, government finances, among others. Data from this indicates that market borrowings of the central government more than doubled post the COVID year of 2019-20.
The Reserve Bank of India’s annual ‘Handbook of Statistics on the Indian Economy’ offers an extensive collection of macroeconomic and financial data related to national income, production, pricing, currency, banking, financial markets, government finances, international trade, balance of payments, and specific socio-economic metrics. Since 1998, this publication has been highly anticipated by researchers for understanding the functioning of the Indian economy. The year 2022-23 marks the 25 edition of this publication.
In this respect, we look at some of the aspects of the Indian economy, primarily focusing on the Central Government’s sources of revenue and streams of expenditure. For a better understanding of the classifications, refer to the explanatory notes (Table no 93 to 96).
Total Receipts of Central Governments at Rs. 45 lakh crores in 2023-24
The Central Government has three primary sources of receipts:
Among the major components of the central government’s receipts, it is observed that the net tax revenue (both direct and indirect) accounts for almost 50% of the total receipts of the Central Government in 2022-23 whereas non-tax revenue accounted for 6%. In terms of capital and revenue receipts, capital receipts account for almost 45%, while revenue receipts account for the rest.
It is also observed that there is a steady growth in central government receipts since 1990. However, between 2019-20 and 2020-21, the total receipts jumped by around 30%, when the average growth rate prior to that was around 13%. In absolute terms, the total receipts grew from Rs. 26.8 lakh crores to Rs. 35.2 lakh crores during this period. The majority of this growth can be attributed to the rise in capital receipts from Rs. 9.9 lakh crore to Rs. 18.8 lakh crore.
The total receipts further grew steadily to Rs. 41.9 lakh crore as per the revised estimates in 2022-23 and Rs. 45.1 lakh crore as per the budget estimates for 2023-24.
Huge jump in market borrowings in recent years
It is evident that capital receipts contributed significantly to the rise in total receipts. Capital receipts consist of these major components: market borrowings, small savings, Provident funds, Special deposits, Recovery of loans, Disinvestment receipts, and External loans. Analysing the component-wise growth in capital receipts, it can be seen that market borrowings accounted for approximately a 60% rise in capital receipts, followed by small savings and external loans. In absolute terms, the market borrowings grew by nearly 120% from Rs. 4.7 lakh crores to Rs. 10.3 lakh crores between 2019-20 and 2020-21. Small savings also grew double from Rs. 2.4 lakh crore to Rs. 4.8 lakh crore during the same period. Together, these two components accounted for 90% of the growth in capital receipts in this period. After a brief fall in 2021-22, these two components grew in subsequent years.
Revenue Expenditure accounts for 85% of the total central government expenditure
Capital expenditures, often referred to as capex, represent the funds spent on valuable assets that serve long-term needs. On the other hand, revenue expenditures encompass expenses that do not lead to asset creation and are usually short-term expenses.
It is observed that revenue expenditure grew from Rs. 27,691 Crores in 1984-85 to Rs. 35,02,136 Crores (Budget Estimates) in 2023-24. Similarly, the capital expenditure grew from Rs. 15,941 Crores to Rs. 10,00,961 Crores (Budget estimates) during the corresponding period. While the revenue expenditure increased by 125 times, the capital expenditure increased by only half, 62 times.
Out of the total expenditure of the central government, the share of revenue expenditure grew from 63% to 78%, while capital expenditure fell from 37% to 22%. Almost one-third of the total revenue expenditure is towards interest payments, followed by defence expenditure at 6%. Further, more than 80% of the capital expenditure is towards capital outlay, out of which expenditure on defence accounts for one-fourths.
Share of development and non-development expenditure is almost same
The budgets of both central and state governments are crafted with the aim of boosting economic development and progress. The expenditure pattern of the central government reveals that the share of development and non-development expenditure is almost equal. The development expenditure stood at Rs. 82,803 Crores in 1994-95, which rose to Rs. 22,63,291 Crores in 2023-24, while non-development expenditure grew from Rs. 82,402 Crores to Rs. 22,39,807 Crores during the same period.
Out of the total development expenditure, the share of expenditure on economic services grew from 41% to 66% while the share of expenditure on social services grew from 7% to 10.8% during the same period.

created: September 28, 2023


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Data: Compared to 2019, GST Collection fell by more than 25% during March to June 2020 in 27 States/UTs
Sai Krishna Muthyanolla
August 5, 2020
COVID-19’s impact on economy is now well known. GST collection numbers from March to June 2020 clearly demonstrate the impact of lockdown. In 27 States/UTs, the GST collection between March & June 2020 fell by more than 25% compared to 2019. Here is a detailed data story on COVID-19’s impact on GST collection across the country between March & June 2020.
As per a Press Release dated 01 August 2020, the gross GST revenue collected for July 2020 was ₹ 87.4 thousand crores. This is 86% of the GST revenue collected during the same month last year.
The second phase of India’s attempt to come out of COVID-19 induced National Lockdown i.e. Unlock 2.0, was effective from 01 July 2020. Unlock 2.0 opened up more economic and business activities in continuation to Unlock 1.0 which was effective from 01 June 2020.
However, the gross GST collection for July’2020 was less than that of June’2020, where in it was ₹ 90.9 thousand crores. Government attributes the higher GST collection in June to the arrears from the previous months (Feb-May’20) which are paid in June’ 20, in view of the extension provided due to COVID-19.
In spite of the collection of arrears, the GST collection for June’2020 was 9% less than that of June’2019. In this story, we do a detailed comparison of GST revenues collected during and in the aftermath of Lockdown, with the same period last year, along with analysing how different States fared in terms of GST revenue collection during this period, compared to the last year.
Gross GST Collection during 1st Quarter FY 2020-21 is 58% of the collection in 2019-20
The Nation-wide Lockdown was announced on 24 March’2020, which was extended further, and the Unlock process started from 01 June 2020.  As per the information available on the official GST Portal,  the Gross GST Collection  i.e. CGST, SGST, IGST (inclusive of GST on Import of Goods) & Cess, for March’20 was ₹ 96.7 thousand crores. This is around 8.5% less than that of March’2019, where in it was ₹1.05 lakh crores.
Lack of Economic activity during the ensuing months had a severe impact of the GST collection. The collection fell by 72% in April’2020 compared to the same month in 2019. In the previous year ₹ 1.12 lakh crores were collected in April, while it was only ₹ 31.6 thousand crores in the current year.  The month of May’2020 recorded a slight improvement compared to previous month.  However, the collections in May were only around 60% of Gross GST collected during the same month the previous year.
As part of the relief measures, Government of India extended the due dates for GST payments of earlier months to June’2020. With the first phase of Unlock being implemented and the arrears being paid, GST collection for June’2020 increased to ₹ 90.3 thousand crores. In-spite of this, the gross collection was around 9% less than that of June’2019.
Overall, during the first quarter of FY 2020-21, the gross GST collected was ₹ 1.83 lakh crores. This is nearly 41% less than the collection of Q1 of 2019-20, during which the Gross GST collection was ₹ 3.11 lakh crores.
Gross GST Collection of 27 States/UTs fell by more than a quarter during March-June 2020, compared to 2019
While the numbers at the national levels indicate a major fall in GST collection during the first quarter of 2019-20, it is not even across the states, with few states performing better while others recording a major dent in their GST collection compared to that of last year.
We take a look at the Gross GST collection for each of the States for the four-month period March-June’2020. Only 4 States/UTs have managed record an increase in Gross GST collection equal to or more than 2019, with only 4 other states recording a less than 25% reduction compared to last year.
In the rest of 27 States/UTs, Gross GST Collection fell by more than 25% in the March-June’2020 period compared to 2019.
No major fall in GST collection of few of the smaller States /UTs
Gross GST collection of Lakshadweep and Tripura for period March-June’2020 was higher than the collection during same period in 2019.
GST collection in Tripura increased from ₹ 233 Crores in 2019 to ₹ 246 crores in 2020, during this period. The shortfall in the month of April 2020 was compensated with an increase in collection in May 2020, when ₹ 95 crores were collected compared to that of ₹ 50 crores in May 2019. There was also a slight comparative increase in June’2020 compared to June 2019.
Sikkim has comparatively higher GST collection among the smaller states and it managed an on-par GST Collection between March-June’2020 compared to the same period in 2019. The higher collection in June 2020 compensated for the lower collection in earlier months of 2020.
Most of the North-Eastern states have recorded a smaller number of COVID-19 cases. Hence, in-spite of being impacted by Nation-wide lockdown, these states have managed to go back to normal GST collection once the Unlock began.
Chhattisgarh, Bihar, Telangana & Andhra Pradesh managed to keep the fall to less than 30%
GST collection in most of the larger states was impacted during the lockdown months i.e. April & May’ 2020, especially the collections being very low during April’2020. However, few of these larger states have managed to recover the GST losses once the lockdown regulations were eased during June’2020. Chhattisgarh, Bihar, Andhra Pradesh, Telangana, Madhya Pradesh, Assam, Karnataka and Odisha are among such states that have managed to keep the fall in GST collections during March-June 2020 to less than 30% of the collection during 2019.
A common feature of these states is the comparatively a smaller number of COVID-19 cases during March-June’2020 period. Telangana was among the first states which has imposed lockdown measures, even prior to Nationwide lockdown. This is evident in the major short fall of GST collection in April’2020 with only ₹ 928 crores collected as against ₹ 3510 crores collected in April’ 2019. The collection for May’2020 was also correspondingly lower than last year. However, once the lockdown was eased in June’2020, GST collection increased to ₹ 3276 crores, which is slightly more than ₹ 3166 crores in June 2019.
Karnataka, which is among the largest GST collecting states also experienced a major shortfall in April’2020 with just over ₹ 2 thousand crores collected compared to more than ₹ 8 thousand crores in April’2019. This shortfall was recouped to an extent with an increased GST collection in June’2020 with ₹ 6.7 thousand crores, a marginal increase over last year.
Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Bihar, Odisha are among the states which have managed to cover up for the shortfall of GST collection during April’2020 with an increased collection in June’2020. These states were among the first states to back to normalcy post the lockdown. However, a recent increase in the number of cases in some of these states could have an impact on future GST collections.
GST collection during March-June’2020 in majority of States is less that 70% of last year
GST collection in around 21 States/UTs during March-June 2020 is less than 70% of the collection last year. Of these,  13 States/UTs have managed to keep their GST collection between 60-70% of the collection in 2019.
Most of these states are also among the worst COVID-19 affected states and have imposed lockdowns at different times in addition to the Nation-wide lockdown.
Kerala is one of the states which has imposed stringent lockdown measures. It is reflected in its overall GST collection during March-April’20 which is only 64% of the collection in 2019. Although like most other states, it managed to have June’20 GST collection at par with last year, the corresponding month-on month deficit in March & April’20 has been greater.
Maharashtra has the highest number of COVID-19 cases with its key cities among the larger COVID-19 positive clusters. Its April’20 GST collection was less than a quarter of the collection last year. However, in-spite of extended lockdowns in some areas, the GST collection in June’20 is at par with the collection in 2019. As highlighted earlier, the collection in June 2020 includes arrears from previous months.
Tamil Nadu, Rajasthan & Delhi are among the early states to have recorded a higher number of COVID-19 cases. This is also reflected in their GST collection during March-June 2020. Gujarat, UP & West Bengal also display a similar trend with GST collections improving in June’2020 but not enough to coverup for the shortfall of previous months.
Less than 60% GST Collection in Jharkhand, Himachal & Uttarakhand compared to 2019
GST collection of Jharkhand was severely affected during lockdown, with the GST collection for April’2020 being less than 9% of the collection during the same month last year. Although there is an increase in the GST collection in May & June’2020, it is still lower than that of same months in 2019.
Uttarakhand also presents a similar case, with shortfall of GST collection even in May & June’2020. Being a tourism reliant state could be one of the reasons for this shortfall even post lockdown. Himachal Pradesh and J&K are among the lower GST collecting states with the impact of April’20 continuing even in subsequent months.
Increasing number of COVID-19 cases could severely impact future GST collections in many States
Data from multiple states indicates a strong correlation between the lockdown and GST collection, with nearly all the states recording a slump in the GST collection during April’2020. The degree of fall in the collection varies from state to state as per the official data.
GST collection in May 2020 has seen a slight improvement compared to April, though the collections were way below the 2019 levels. Post the easing of lockdown regulations and the extension of timeline to pay the arrears, an increase in GST collection is seen in most of the states in June 2020. Some of the states have been more proactive in lifting the lockdown measures while few others like Maharashtra continue to have a large number of containment zones affecting the regular economic activity.
As seen in the case of Telangana, Karnataka & Tamil Nadu, attempt to resume normal business has resulted in a corresponding increase in the number of COVID-19 cases, with few of these states resorting to lockdown and containment measures once again. In some ways, this is a catch-22 situation for governments as resumption of normal business is leading to increased COVID-19 cases which would in turn force governments to impose lockdown measures.
Though the national level GST numbers for June 2020 indicated some semblance of recovery, the collection for July 2020 fell by close to 15% compared to 2019. This fall coincided with the huge increase in COVID-19 cases in July 2020. Currently,  more than 50 thousand new cases are being reported daily.
All this means a tough choice for the Centre as well as the States between containment of COVID-19 infection and resumption of normal economic activity. Strategies at micro-level appear to be a better way forward which identify and differentiate risk-free zones for business activity and infection-prone areas for containment.
Featured Image: GST Collection

source: news-factly

created: August 5, 2020

license: Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/

author: Sai Krishna Muthyanolla


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Data: Price of Domestic LPG Cylinder Up By 90%, and Commercial By Over 100%, Compared To May 2020.
Sai Krishna Muthyanolla
March 6, 2023
Data from the PPAC & OMCs indicate that the price of LPG cylinder (both domestic & commercial) has increased significantly since May 2020. Since there are no subsidies except for PMUY beneficiaries, the price rise will affect significant section of the population.
The prices of domestic and commercial LPG cylinders were increased recently, and are effective from 1 March 2023. The price of domestic LPG cylinder is increased by Rs. 50 and in the case of commercial LPG cylinders the hike is Rs. 350. With this increase, the 14.2 Kg Domestic LPG will cost around Rs. 1103 in Delhi while the commercial cylinder’s price is Rs. 2119.50.
This is the second hike in the price of commercial LPG cylinders in 2023, the first one being an increase of Rs. 25.
In the story, we also look at the trends in prices of LPG cylinders, petrol and diesel over the years. Data considered is the price in New Delhi. The prices vary across the country due to transport & other factors in the case of LPG while they vary because of state VAT in the case of petrol & diesel.
Since the beginning of 2021, the price of Domestic LPG cylinder increased 13 times.
Liquified Petroleum Gas (LPG) in India is used for both domestic purpose and commercial purposes. The LPG prices are determined by State-run oil companies – IOCL, BPCL & HPCL based on a host of factors. The respective LPG brands of these oil companies are – Indane Gas, Bharat Gas and HP Gas.
For this analysis, we have considered the price of LPG cylinders in Delhi updated for Indane Gas by IOCL.
Domestic LPG
As highlighted above, the price of the standard 14.2 Kg domestic LPG cylinder was increased to Rs.1,103 w.e.f for 01March 2023. The government currently runs the targeted subsidy scheme of Rs. 200 per 14.2 Kg cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries for up to 12 refills a year for the year 2022-23. No other subsidy or direct benefit transfer of the subsidy money is applicable as of date.
Prior to the recent hike, the price per domestic LPG cylinder was Rs. 1,053, which was effective from 06 July 2022. This increase was in continuation of a series of price hikes which date back to 01 July 2021 when the price was increased from Rs. 809 to Rs. 834.5.
During 01 July 2021 to 01 March 2023, the price was increased 9 successive times. Overall, the increase in price was Rs. 294. Out of these 9 times, the price was increased by Rs. 50 each time on 4 occasions.  Prior to this, there price was increased 9 successive times from 01 June 2020 to 01 March 2021. During this period, the price increased from Rs. 581.5 to Rs. 819. In other words, compared to the price on 01 May 2020, the price of a domestic LPG cylinder increased by almost 90%.
Commercial LPG
In the case of the 19 kg commercial LPG cylinder, there has been a fluctuating trend in price hikes. Over the years, there have been successive price hikes followed by a drop in the price.
If the data of the last few years is considered, there is a considerable increase in the price of commercial LPG cylinders since 01 June 2020.
On 01 June 2020, the price increased to Rs. 1139.5 per LPG cylinder from the earlier Rs.1029.5. It was followed by an immediate drop in price. However, during the three-year period since, the price increased 20 times. The greatest increase in price was the most recent one, wherein it increased by Rs. 350.5 per cylinder. In the case of commercial LPG cylinders, the price has increased by more than 100% compared to 01 May 2020.
After continuous increase in March/April 2022, price of petrol now lower & stable
The price of international crude oil has a significant impact on fuel prices in India i.e., prices of Petrol & Diesel, as India imports crude oil to meet most of its domestic requirements. Though government technically has no role in fixing the retail selling price of petrol & diesel as both are de-regulated, it is common knowledge that government tries to balance the impact of a steep rise in price through taxation changes or other means.
For this analysis, data from Petroleum Planning and Analysis Cell (PPAC) is considered. The prices vary across the country as state taxes vary from one state to another. We have considered the prices in Delhi for analysis. Comprehensive data on the Prices of Petrol & Diesel can be found at Factly’s Dataful.
The most recent price hike on petrol was on 06 April 2022, when the price of petrol in Delhi increased to Rs. 105.41. Since then, there has been no increase in the price of Petrol. This was a culmination of a 16-day period of everyday increase in price starting 22March 2022. Except for 2 days in between, there was an increase in price every day from 22 March 2022 to 06 April 2022. While it is not the longest successive streak of daily price increase, it is the highest in terms of value, at least since January 2018. During this period, the price of Petrol increased by Rs. 10. Prior to this period, there was another extended period starting from 27 September 2021 to 02 November’2021, when there was an almost every day increase in the price.
The price decreased in May 2022 after the government reduced excise duty both on petrol & diesel. The price has remained constant after this decrease.  Factly’s analysis on correlation between the price hike of fuel and Elections in the country can be read here.
Increasing trend in price of Diesel more prominent since November 2020
Analysis of trends of the daily price of diesel since 01 January 2018 indicates multiple distinct phases.  For the first 10 months of 2018, there was a largely increasing trend in diesel prices. During this period, the price of Diesel in Delhi increased from Rs. 59.5 per litre to Rs. 75.6 per litre.  This was followed by a period of alternating decline in diesel prices and a comparatively stable period up until April 2020.
During the next three months, the price of diesel per litre jumped from Rs. 62.3 to around Rs. 82 per litre. This period coincided with the COVID-19 pandemic across the world when the supply of international crude was affected contributing towards an increase in crude oil prices.
With the easing of the first wave of the COVID-19 pandemic, the prices fell in subsequent months. However, post-November 2020, there was a more sustained period of price rise. This period lasted nearly a year, with the price of diesel crossing Rs. 98 per litre by November 2021.
As mentioned earlier, the government reduced excise duty on petrol & diesel in May 2022 which reduced the price, and the same has remained stable since.
While the changes in international crude prices have a significant impact on the prices of LPG, Petrol & Diesel, these prices are still affected by government policy, directly in the form of taxes and indirectly by influencing the Oil Marketing Companies (OMCs). The political situations prevailing in the country in terms of elections & inflation, revenues of the government, the burden on the public, etc. are a few of the various factors that have a bearing on the prices.


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Comparison of PM-KISAN data with that from Agriculture Census shows gaps in coverage
Sai Krishna Muthyanolla
December 11, 2020
The PM-KISAN scheme currently benefits around 10 crore farmers as per the available data. While there is no authentic data on the estimated number of farmers who may be eligible for benefits under the scheme, the data on operational holdings from the Agriculture Census 2015-16 does highlight gaps in coverage from twice the number in states like Punjab to less than 50% coverage in Kerala.
The Government of India launched PM-KISAN (Pradhan Mantri Kisan Samman Nidhi) to provide income support to the landholding farmers in the country. This is to supplement their financial needs to procure various inputs related to agriculture & allied activities along with domestic needs. The scheme is modelled after similar schemes in states like Telangana & Odisha.
Under this scheme, the eligible beneficiaries would receive Rs. 6000 per year in three equal instalments. The first instalment was paid on 01 December 2018. Initially, the scheme was extended to only those farmer families who had a combined farm holding of two Hectares or less i.e. Small & Marginal farmers. However, since 01 June 2020, the scheme was revised to include all the farmers irrespective of the size of their holding.
At the time of revision, the government estimated that the scheme would benefit 14.5 crore farmers in the country. However, the data indicates that the number of beneficiaries is less than this estimate.
Number of beneficiaries for the recent instalment reduced by more than 57 lakhs
Since the inception of PM-KISAN, the government has paid out 6 instilments to the beneficiaries. The payment of the current instalment i.e. 7 instalment started on 01 December 2020.
The number of beneficiaries who received the assistance from the government varied largely over the 6 instalment periods. The change in eligibility criteria can be considered as one of the key factors which could have influenced the difference of the numbers.
While it is a Central Sector Scheme, the responsibility to identifying and validating the beneficiaries is left to the respective states. As on date, all the States & UTs with the exception of West Bengal have joined this Central Sector Scheme.
As per the information published on PM-KISAN portal, there were around 3.16 crore beneficiaries during the first instalment period i.e. during Dec’2018 – Mar’2019.
The period of second instalment coincides with the government’s decision to change the eligibility criteria. As per government estimates, this would add another 2 crores more farmers to the scheme.
By the time of announcement, 2.66 crores beneficiaries received the amount in the second instalment which by the end of period increased to 6.6 crore beneficiaries.
In the next two instalments, the number of beneficiaries under PM-KISAN were 8.7 crores and 8.9 crores.  With the COVID-19 pandemic and the lockdown, the government of India announced Pradhan Mantri Garib Kalyan Yojana (PMGKY), to provide assistance to marginalized sections during the pandemic. As a part of this scheme, there was a frontal payment of the Rs. 2000, the instalment due to the beneficiaries under PM-KISAN. While the government estimated that 8.7 crore farmers could get benefitted (at the time of announcing PMGKY), data indicates that there were 10.4 crores beneficiaries during April-June’2020. This was also corroborated in response to an RTI application filed by Venkatesh Nayak of the Commonwealth Human Rights Initiative (CHRI).
An increasing trend has been observed in number of beneficiaries with every instalment period. However, contrary to this trend, for the period August -November’ 2020, the number of beneficiaries fell by about 57 lakhs compared to the previous instalment and fell to 9.8 crores.  While the gradual increase over the last few instalments is understandable on account of new farmer addition & validation, the fall in beneficiaries to the tune of more than 57 lakhs raises important questions about the identification & validation of beneficiaries.
Even after two years, coverage of PM-KISAN is about 75% of the estimated number
After making changes to the eligibility criteria to extend the scheme to all farmers irrespective of the size of holding, the government estimated that there would be around 14.5 crore lakh beneficiaries. However, the greatest number of beneficiaries of the scheme so far has been 10.4 crores during the 5 instalment i.e. Apr-Jul 2020. The latest update on PM-KISAN portal shows the number of beneficiaries in upwards of 11 crores for the ongoing 7 instalment for period. This accounts to about 75% of the government’s estimate of 14.5 crore total farmers eligible for the scheme.
So, did the government overestimate the number of beneficiaries? The available data indicates that that the government estimate is close to the figures available from the latest Agricultural Census.
As per the information available from the latest Agriculture Census (2015-16), the total number of land holdings accounted to about 14.6 crores. Considering that there is an increase of 80 lakh land holdings compared to 2010-11 Agriculture Census, it can be estimated that the current numbers in 2020 could be actually higher than 14.6 crores.
West Bengal which is not yet part of PM KISAN accounted for around 72 lakh land holdings in 2015-16 census. Even after excluding this state, the number of operational land holdings and hence the number of farmers in the rest of the country could be around 14 crores, implying that nearly 3 crore farmers are still not covered by the scheme so far.
Even taking into consideration the earlier definition of extending benefit to those with less than 2 hectares of land i.e. Small & Marginal farmers, the 2015-16 census indicates that there are around 12 crore Small & Marginal land holdings. Even by the earlier criteria, we can estimate the PM-KISAN does not cover all the small & marginal farmers under its gambit. The exclusion of certain categories of beneficiaries as per the scheme guidelines also does not explain the gap since the government’s estimate of beneficiaries is also more or less similar to the total number of operational land holdings as per Agricultural Census of 2015-16.
Further, PM-KISAN does not provide data on the size of the holdings, as the benefit is based on individual farmers with farmland and not on the size of the holding.
Southern States along with Maharashtra, Bihar, Jharkhand etc. have lesser coverage of beneficiaries
The coverage of beneficiaries under PM-KISAN is approximately around 75% of the estimated number of beneficiary farmers. It is also 75% of the number of  operational land holdings as per the estimate of Agriculture Census 2015-16. However, large variances exist between the states.
Even from a regional perspective, the coverage is higher in the North compared to the other parts of the country. As per the Agriculture Census 2015-16, Punjab had 10.93 lakh operational land holdings. However as per PM-KISAN data, there are around 23.28 lakh beneficiaries i.e. more than double the number agricultural land holdings as of 2015-16. Even factoring a potential increase in the number of land holdings compared to 2015-16, the coverage is very high.
Similarly, other Northern states of Haryana, Uttar Pradesh, Uttarakhand, Himachal Pradesh etc. have a higher coverage of PM-KISAN beneficiaries compared to the number of operational land holdings as per 2015-16 Agriculture census.
Gujarat & Rajasthan have 108% and 84% coverage when the number of PM-KISAN beneficiaries are compared with the number of operational land holdings in 2015-16 Agriculture census.
In contrast to these states, almost all the southern states have very less coverage under PM-KISAN scheme, with the highest among them being Telangana with 63% and least Being Kerala with 44% compared to the number of operational land holdings as per the 2015-16 Agriculture census.
Even Maharashtra, another major agricultural state and the one with a recorded history of farmer distress has only 67% coverage.
Variances in the coverage raises important questions
Large scale variances between the states indicates excess coverage as well as widespread under coverage of the Scheme in different states.  Among the larger states, the number of beneficiaries in Punjab is almost twice the number of operational land holdings. Though the comparison is with the census of 2015-16, there cannot be such an increase in just 5 years. In fact, between the agricultural census of 2010-11 & 2015-16, there is only an increase of 40000 operational land holdings in Punjab.  Such high coverage raises questions about ghost beneficiaries.
On the other hand, the lower number in Southern States and few other states is a worrisome aspect about the scheme. It needs to be ascertained if the support extended by some of the State governments in these States reduces the need for opting for PM-KISAN. It has to be noted that not all states have such state level schemes.
The lower coverage in economically backward states like Jharkhand and Chhattisgarh also raises questions on the efforts of both the State & Central governments to ensure benefits for the farmers.  As per the 2015-16 Agricultural census, Jharkhand reported around 9.79 Lakh operational holdings for Scheduled Tribes (STs) while the PM-KISAN data indicates only 2.9 Lakh ST farmers who are beneficiaries of the scheme. This also highlights another dimension of possible disparity in availing benefits due to social and economic status among the farmers.
It is high time that all the state governments & the central governments do a thorough review of the beneficiaries with reference to the numbers from the Agricultural census to ensure that all those who are eligible receive benefits under the scheme.

created: December 11, 2020


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Data: Complaints to Banking Ombudsman increased by about 11% in 2020-21
Sai Krishna Muthyanolla
January 31, 2022
RBI recently released the Annual Report of Ombudsman Schemes for the year 2020-21. The report notes that the number of complaints to the banking ombudsman has increased by about 11% while the disposal rate has also increased significantly. Here is a review.
The Reserve Bank of India (RBI) recently launched the Integrated Ombudsman Scheme 2021 (RB-IOS). The Scheme launched in November 2021, integrates three existing Ombudsman Schemes of RBI. Factly had earlier written an explainer on this integrated scheme.  Single point of reference for all complaints, better Turn Around Time (TAT) and cost-free redressal are a few of the targeted benefits of the integrated scheme.
Recently, the RBI released the Annual Report of Ombudsman Schemes, 2020-21. This report covers the period of 01 July 2020 to 31 March 2021, to align with the change of RBI’s Financial year from “July-June” to “April-March”. The Annual Report covers the activities under the earlier three separate Ombudsman schemes, as the integrated scheme was only launched recently. In this story, we analyse the data relating to Banking Ombudsman Scheme (BOS), as provided in the recent annual report.
11% Y-o-Y increase in the number of complaints received under BOS
As indicated earlier, there is a shift in the accounting year of RBI from July-June to April-March. To accommodate the change, the annual report for 2020-21 covers only the 9-month period of July 2020 to March 2021.
As per the latest Annual report, the total number of complaints received by BOS during this transition year of 2020-21 (July -March) was 2.73 lakhs. In the previous complete year of 2019-20 (July-June), this number stood at 3.08 complaints.
The Annual report also provides data for 01 April 2020 to 31March 2021, to facilitate a YoY (year on year) comparison. During this 12-month period, 3.41 lakh complaints were received by the 22 Offices of Banking Ombudsman (OBS), which is around 11% more than during 2019-20 (July 2019 to June 2020).
Maximum complaints relate to ATM/Debit Cards
Complaints relating to ATM/Debit Cards continue to account for the highest share of complaints received by the banking ombudsman though the share has reduced over the years. During 2020-21(April-March), 60.2 thousand complaints relating to ATM/Debit Cards were received, accounting for 17.6% of the total complaints. In other words, more than one in six complaints received by the banking ombudsman were related to ATM/Debit Cards.
During 2019-20 (July-June), 67.8 thousand complaints were related to ATM/Debit Cards i.e., 22 % of the total complaints in that year. This indicates a YoY fall in the number of complaints relating to ATM/Debit Cards. The fall is evident even when the complaints for only the 9-month period of the transition year are considered. During the period 2020-21(July-April) around 47.5 thousand complaints related to ATM/Debit Cards were received, despite an overall increase in the number of complaints to the banking ombudsman.
The increase in the total number of complaints can be attributed at large to those related to Credit Cards and of failure to meet commitments. A total of 40.71 thousand i.e., 11.9 % of the total complaints during 2020-21 (April-March) were related to Credit Cards. During 2019-20 (July-June), they constituted only 9.3%. Specifically, during July-March of 2020-21, 33.7 thousand complaints, constituting 12.36% of the total complaints during the transition year, were related to Credit Cards.
There is also a significant increase in the number of complaints received for ‘Failure to meet Commitments’.  The share of these complaints during 2020-21 (April-March) was 10.5%, up from 8.1% during 2019-20 (July-June). Complaints categorized as ‘Others’ form a significant 11.6% of the total complaints. A major part of those complaints are the ones relating to non-payment of cash or the cash being debited from the account, but ATM did not dispense the amount.
Rate of Disposal increased to 96.7% during 2020-21
Out of the 3.02 lakh complaints handled during the 2020-21 (July-March), around 2.92 lakh complaints were resolved i.e., around 96.7 % of the complaints handled. This is an improvement over the previous year when 92.3% of the complaints handled in 2019-20 (July-June) were resolved.
This increase in disposal has significantly reduced the number of complaints pending at the end of the year. At the beginning of July 2020, there were 24.49 thousand pending complaints carried forward from the previous year. However, by the end of March 2021, the number of pending complaints fell to around 10.08 thousand.
Out of the 24.49 thousand complaints that were carried forward from 2019-20, 13.35 thousand were complaints that were pending for more than 3 months. The significant aspect of the performance of OBOs during 2020-21 was the faster disposal of the complaints. The number of complaints that were pending for more than 3 months was brought down to only 827.  Unlike the earlier year, a major portion of the complaints that are pending by the end of March 2021, are those pending for less than one month.
Mutual Settlement is the major mode of disposal of the Maintainable complaints
The complaints received by the banking ombudsman are categorized as Maintainable & non-Maintainable complaints. Maintainable complaints are all those complaints that fall under the grounds for complaints specified under Clause 8 of BOS.
The proportion of non-Maintainable complaints (out of total complaints) fell to around 39.9% during 2020-21 compared to 45.7% in 2019-20. The complaints being first resort complaints (FRC) is the main reason for non-maintainable complaints. FRC are those that are directly submitted to the banking ombudsman without filing the same with the respective bank. The other two major reasons for non-maintainability include, ‘not represented properly’, ‘complaints already dealt with earlier’.
Among the maintainable complaints that were disposed, the major mode of disposal is by mutual consent/agreement. Out of the 1.71 lakh maintainable complaints in 2020-21 (July-March), 1.24 lakhs i.e., around 72.7% were settled through mutual agreement. The proportion remains nearly the same as the earlier year when out of the 1.73 lakh maintainable complaints in 2019-29, 73.1% were disposed through mutual agreement.
Another key mode of disposal was the rejection of the complaint. Around 27.1% of the complaints were disposed of by rejecting the complaints. The major reason for the rejection of the complaints is that the complaints are not as per grounds of complaint (Clause 8) – Clause 13(a). About 97% of the rejected complaints are due to this reason.
The Turn Around Time (TAT) of the banking ombudsman to dispose the complaints has improved significantly. During 2019-20, it was 95 days, which reduced to 55 days during 2020-21 (July-March).
Improvement in TAT across most categories
The TAT has improved across most categories of complaints.  Among the most significant improvement is in the category of ATM/Debit cards. During 2019-20, the TAT for this category was 102 days, which improved to 62 days in 2020-21.
Among the other major categories of complaints, the TAT of complaints regarding Mobile/electronic banking reduced from 95 days to 56 days and in the case of Credit Cards, it reduced 50 days from 96 days.
Complaints relating to Direct Selling Agents (DSAs) and recovery agents had the highest TAT of 104 days in 2019-20, which reduced to 49 days in 2020-21. As per the annual report, the significant improvement in TAT of disposal is due to the stabilization and fixing of the technical glitches of the Complaint Management System (CMS).
Operational issues with Banks along with lack of customer awareness are major reasons for complaints.
In the Root Cause Analysis (RCA) provided in the Annual Report, issues with billing and fees levied, harassment/misbehaviour by recovery agents and wrong reporting to Credit Information Companies (CICs) were observed to be the major reasons for complaints relating to Credit Cards. It has to be noted that there has been a significant increase in the number of complaints regarding Credit Cards.
Opaqueness regarding the charges & fees, operational issues of Credit Card companies like non-coordination between the departments, erroneous reporting, etc. are analysed to be among the root causes. Negligence & lack of awareness among the customers is also a key reason for the complaints filed. The increase in the number of complaints relating to credit cards can be attributed to a few of these reasons.
Unauthorized & fraudulent transactions in accounts are another major reason for which complaints were raised. As per the RCA provided in the report, the main reasons for these issues can be attributed to a lack of awareness on part of the consumers along with lapses in the KYC process.
The Integrated Ombudsman Scheme launched recently is expected to make the process of registering the complaints as well as disposal simpler. However, improvements in the banking process and improving consumer awareness are key to reducing complaints.
Featured Image: Complaints to Banking Ombudsman

created: January 31, 2022


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Data: Complaints to Ombudsman about Electronic Banking Increase While Those Related To ATM/Debit Cards Decrease
Sai Krishna Muthyanolla
March 19, 2024
The Annual Report of the Ombudsman Scheme 2022-23 was released recently. Data indicates that cases have increased in the areas of mobile/electronic banking, loans and advances, and deposit accounts. It also reveals fluctuations in other areas such as credit cards. Cases related to ATM/ Debit Cards have declined in the recent years, but the number is still significant.
The Annual Report of the Ombudsman Scheme 2022-23 was released recently. It provides valuable insights and information to all stakeholders involved, showcasing the progress and effectiveness of the ombudsman scheme in protecting customer interests in the banking sector. This report is the second one after the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS) was launched in 2021. It is also the first standalone report released under RB-IOS.  To know more about the integrated scheme RB-IOS, check out the explainer by Factly.
Prior to the integrated scheme, there were separate Ombudsman schemes for banks, NBFCs and digital transactions. The erstwhile Banking Ombudsman Scheme (BOS) introduced by the RBI in 1995 covered Scheduled Commercial Banks (SCBs), Scheduled Primary Urban Co-operative Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), and Payment Banks (PBs). In this story, we examine the trends in complaints received by the Ombudsman for banking-related issues, as given in the annual reports.
It should be noted that the 2020-21 report covers the period from 01 July 2020 to 31 March 2021, aligning with RBI’s shift in the financial year from “July-June” to “April-March.” Previously, reports covered the period from July to June. Subsequent reports from 2021-22 and 2022-23 cover the period from April to March.
Cases handled by ORBIOs declined between 2021-22 and 2022-23
According to the latest report, in 2022-23, under RB-IOS, there was a significant 68.2% increase in complaints, crossing 7 lakh cases. Of these, 234,690 were handled by ORBIOs (Office of the Reserve Bank of India Ombudsman), and the remaining nearly 4.7 lakh cases were resolved by the Centralised Receipt and Processing Centre. In terms of the number of complaints dealt with at ORBIOs, there was a decline from the previous year, from over 3 lakh cases to below 2.35 lakh cases. The decline is due to the filtering out of non-maintainable complaints under the new RB-IOS framework.
About 84% of the cases in 2022-23 were against banks
Of the cases dealt with at ORBIOs, nearly 84% were complaints against banks. In the last 12 years, the number of complaints against banks received by the Banking Ombudsman or the ORBIOs increased from less than 73,000 in 2011-12 to over 3.41 lakh cases in 2020-21, a 4.7-fold increase. However, it has dropped in the last two years. In 2021-22, the number dropped by 21.5% and dropped further by 26.6% in 2022-23.
7 public sector banks and 5 private sector banks together accounted for 75% of the cases in 2022-23
12 banks alone accounted for 75% of the banking-related cases received by ORBIOs in 2022-23. These 12 banks accounted for an average of 73% of the cases between 2017-18 and 2022-23, except in 2020-21. Among these 12 banks, 7 were Public Sector Banks and 5 were Private Sector Banks. The cases against these 7 public sector banks alone accounted for an average of 42% of the cases against banks registered between 2017-18 and 2022-23.
Every year, complaints against the State Bank of India (SBI) constituted the highest share among all banks. Nonetheless, the share of complaints against SBI fluctuated over the years, starting at 28.73% in 2017-18, peaking at 30.38% in 2018-19, then decreasing to 16.82% in 2020-21, and slightly rising to 20.52% in 2022-23.
Among the private sector banks, until 2020-21, number of cases against HDFC Bank was the highest. In 2021-22, the cases against it dropped by 26% and cases against ICICI Bank became the highest among private sector banks.
Cases related to deposit accounts doubled while that related to ATM/Debit cards fell to a five-year low in 2022-23
The types of complaints against banks are classified into 10 categories. The trends in 9 categories excluding the ‘others’ category have been given considered for the analysis.
Among the cases filed with the Ombudsman, cases related to mobile/electronic banking were the highest in 2022-23, closely followed by cases related to loans and advances, with more than 39,000 cases reported in each category. More than 33,000 cases related to deposit accounts were reported too. Altogether, the 3 categories contributed to 57% of the cases in 2022-23.
In the last two years, the number of cases related to deposit accounts doubled while that related to loans and advances increased by 61%. Cases related to Para banking doubled between 2020-21 and 2022-23.
On the other hand, the cases related to ATM/Debit cards fell to a five-year low in 2022-23. Cases related to pensions and remittances also dropped to the lowest in 2022-23 since 2017-18.
Overall, the data indicates that cases have increased significantly in the six years considered in mobile/electronic banking, loans and advances, and deposit accounts. It also reveals fluctuations in other areas such as credit cards. Cases related to ATM/ Debit Cards have declined in recent years, but the number is still significant.
Complaints disposal rate of ORBIOs is high
Across all types of complaints dealt with, ORBIOs have a healthy disposal rate. It was almost 98% in 2021-22 and 2022-23. There was a significant decline in the number of complaints pending beyond 30 days, from 0.26% as of 31 March 2022 to 0.04% as of 31 March 2023.
The Customer Education and Protection Department (CEPD) aggregates Root Cause Analyses (RCAs) from the ORBIOs and Customer Education and Protection Cells (CEPCs) to pinpoint and rectify service deficiencies. These analyses serve as policy inputs. It revealed key issues such as unauthorized digital transactions due to weak fraud prevention, delays in transaction reversals from insufficient daily reconciliation, communication gaps on loan terms, centralized pension issue resolution absence, fees for low deposit balances due to policy gaps, product mis-selling from information asymmetry, delayed credit report updates, and uneducated recovery agents on regulatory guidelines. These findings highlight areas needing improvement in customer service and regulatory compliance across financial institutions.
Measures identified by RBI for 2023-24 to improve customer service
The Reserve Bank aims to enhance its customer service and grievance redressal mechanisms through several initiatives. Firstly, it plans to review, consolidate, and update its regulatory guidelines on customer service. Additionally, the internal ombudsman schemes for different types of regulated entities will be reviewed and integrated to ensure comprehensive coverage. Moreover, the Reserve Bank will establish two new Contact Centres in local languages, equipped with disaster recovery and business continuity facilities, to improve accessibility and support for customers. Furthermore, the RBI also has plans to explore leveraging Artificial Intelligence in the Complaint Management System to enhance complaint categorization, decision-making support, and overall customer experience, with a focus on strengthening customer protection and expediting grievance redressal.


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Consolidation has been the story of India’s Telecom sector in last decade
Sai Krishna Muthyanolla
May 9, 2022
Consolidation has been the story of the telecom sector in India in the last decade. By the end of 2012, there were 15 different service providers which decreased to 8 service providers by the end of 2021. While there may be 8 service providers providing wireless services by the end of 2021, the top-4 command a market share of more than 99%. In contrast, the top-4 in 2012 had a little over 65% market share.
India ranks second only to China in terms of the number of telephone users (both landline & telephone users) in the world. India’s tryst with telecommunication started in British India with the introduction of the Telegraph, witnessing a slow but gradual growth in post-independence India.
The establishment of C-DOT in 1984 was a landmark moment with encouragement for indigenous development of Telecommunication in India.  The Liberalization, Privatization & Globalization brought about in the 1990s ushered in a great change for the telecom sector & increased demand for telephone connections across the country.
The Telephone Regulatory Authority of India (TRAI) was set up in 1997 as the regulatory authority for the telecom sector followed by the setting up of Bharat Sanchar Nigam Limited (BSNL) in 2000. With the increase in demand for telecom services & the subsequent development & accessibility of better technology, the Government of India opened the telecom sector to private players for offering various services.
Over the years, despite a significant increase in the number of telephone users especially mobile users in the country, the number of subscribers of the state-owned BSNL has been declining.  The data provided by the Government in response to a recent question in Lok Sabha indicates the extent of this fall in BSNL subscribers.
In this story, we look at the trends in subscribers for BSNL & other operators in the country. The data considered for the story is based on the information available with TRAI.
Slower growth of Wireless subscribers over last three years
As per TRAI, by the end of December 2021, there were a total of 115.46 crore wireless telephone subscribers in India. This is slightly more than the 115.38 crores by the end of 2020. It is a continuation of slow growth observed in 2020, after a fall in the number of subscribers during 2019.
By the end of 2018, there were 117.6 crores wireless telephone subscribers in the country, which fell to 115.14 crores by the end of 2019. This contrasts with the continuous year-on-year growth that was observed in the earlier years. By the end of 2012, there were 86.47 crores subscribers which increased to 117.6 crores by the end of 2018, a growth of 36%. Overall, during the 10 years i.e., 2012 to 2021, the growth rate was 33.5%. In fact, the trend in the last 10 years can be categorized into two distinct five-year periods. The first five years witnessed a higher growth rate which slowed down during the second five-year period starting in 2017.
A completely different scenario is observed in the case of wireline i.e., Landline connections during 2021. During the 10-year period from 2012-2021, this is the first time that the number of Wireline connections at the end of the year is higher than the earlier year. After a year-on-year decline from 3.08 crores by the end of 2012 to 2.01 crores at the end of 2020, the number of wireline connections increased to 2.38 crores by the end of 2021.
BSNL’s market share in Wireless subscribers falls below 10%
Over the past 10 years, the wireless telecom industry is in a state of flux in India. While many service providers exited the space, there were new entrants & consolidations. We look at four of the major current wireless service providers and analyse the trends in the number of subscribers over the 10-year period of 2012-2021.
BSNL: By the end of 2021, the total number of wireless subscribers of BSNL was 11.43 crores, which is around 10% of the total wireless i.e., mobile subscribers in the country. Compared to the end of 2020, there is a slight fall in the number of subscribers, when it was 11.86 crores.
This fall in numbers in 2021 put an end to the increasing trend in the number of BSNL mobile subscribers observed since 2015. The year 2014 witnessed the greatest fall in the number of wireless subscribers from 9.63 crores by the end of 2013 to 8.14 crores by end of 2014.
While the number of BSNL mobile subscribers in 2021 is higher compared to 2012, the market share of BSNL among mobile subscribers in the country fell from 11.5% in 2012 to 9.9% in 2021. While BSNL did cede space to other operators, the decline was not dramatic during this period.
Bharti-Airtel: Amidst all the churn in the telecom industry, along with BSNL, Bharti Airtel has been a constant presence. In 2012, it had 18.19 crore mobile subscribers and a 21% market share. In the ensuing years, it has not only increased its subscriber base but also increased its share.
By 2020, It nearly has 31% of the total market share with around 35.58 crore subscribers, second only to Reliance Jio, to whom it ceded its top position in 2019. It has to be noted that in 2018, all Tata Docomo users were merged with Airtel.
Reliance Jio: Reliance Jio registered an impressive growth since its launch in 2016. By the end of 2016, there were 7.22 crore subscribers of Jio mobile services, which constituted a 6.4% market share. This number doubled in the ensuing year and Jio continued to add on subscribers at a steady pace. The number of new subscribers to Jio slowed down in 2020 & 2021. Nevertheless, by the end of 2021, Reliance Jio has 41.57 crore, wireless subscribers, with a 36% market share. Within six years of launch, Jio not only added crores of subscribers but became the number one in the Indian market.
Vodafone-Idea: By the end of 2021, Vodafone-Idea (Vi) has a 23% market share and is the third-largest provider in the country. It came into existence with the merger of Vodafone & Idea cellular in 2018. Prior to the merger, Idea has increased its mobile subscriber base from 11.39 crores in 2012 to 19.65 crores by end of 2017. During this period, Vodafone increased its numbers from 14.75 crores to 21.25 crores. With the merger, the total number of subscribers of Vi by end of 2018 was 41.87 crores, which was higher than both Airtel & Reliance. However, Vi has lost its subscribers over the ensuing three years. Within four years (2018 to 2021) of the merger, Vi lost more than 35% subscriber base, which is more or less equal to the subscriber base added by Reliance Jio during this period.
A declining trend in Wireline subscribers is largely due to the fall in subscribers of BSNL
As highlighted earlier, except for 2021, there is a continuous decline in the number of wirelines (commonly known as landline) subscribers. By the end of 2012, BSNL had 2.1 crore wireline subscribers which were around 68% of the total such subscribers in the country. The other major players in 2012 were MTNL followed by Airtel & Tata Tele.
In the ensuing years, the number of wireline subscribers of BSNL declined continuously. By the end of 2021, there are only 0.76 lakh BSNL wireline subscribers. Despite a fall in the share from 68% in 2012 to around 31% in 2021, it still retains the top position as the largest wireline service provider in the country among the telecom companies. MTNL also witnessed a decline in the number of wireline subscribers during this period.
Meanwhile, the decline is not observed in other major wireline service providers – Airtel, Tata Tele & Reliance Jio. While Airtel & Tata Tele added wireline subscribers, they aren’t at the scale of the fall in BSNL subscribers to arrest the slide in the overall wireline subscription numbers.
Reliance Jio, as seen in the case of wireless subscribers significantly increased its subscriber base even in the wireline category. By the end of 2018, it had 11 lakh subscribers, which increased to 53 lakhs by end of 2021.
Significantly, there was an across-the-board increase in the number of the wireline subscriber base of all major players (BSNL, Bharti Airtel, Reliance Jio) in 2021.
Consolidation of the telecom space is the story of the last decade
In the case of wireless services, data indicates that Reliance Jio witnessed an exponential growth in the number of subscribers. Bharti Airtel also added newer subscribers. The increase in the subscriber base of both these players in the last four years (2018-2021), especially of Reliance Jio is not because of the expansion of the overall subscriber base but because of the loss of market share of Vi.
Consolidation has been the story of the telecom sector in India in the last decade. By the end of 2012, there were 15 different service providers which decreased to 8 service providers by the end of 2021. While there may be 8 service providers providing wireless services by the end of 2021, the top-4 command a market share of more than 99%. In contrast, the top-4 in 2012 had a little over 65% market share.
Featured Image: India’s Telecom sector


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Data: Consumer Durables/FMCG, Corporate Retail Outlets, Traders, Services Account For More Than a Third of The Amount Guaranteed Under ECLGS - FACTLY
Sai Krishna Muthyanolla
January 24, 2023
To mitigate the liquidity constraints, the Government of India introduced the ECLGS scheme in May 2020. Under this, 100 percent guarantee is extended to the member lending institutions (MLIs) in respect of credit extended by them to the borrowers. Data indicates that as of 30 November 2022, the amount guaranteed under this scheme increased to Rs. 3.58 lakh crore, while the number of borrowers benefitted improved to 1.19 lakh. Consumer Durables/FMCG, Corporate Retail Outlets, Traders, Services account for more than a third of the amount guaranteed under ECLGS.
MSMEs in India and their contribution to the country’s growth is well documented. They form a substantive chunk of the Indian economic system and play an important role in employment generation. Yet, this sector remains one of the most vulnerable in terms of cash flow management. Both supply and demand side reasons exist behind such vulnerability. The supply side difficulty is being unable to get adequate financial support even for profitable enterprises, while the demand side problem being the lack of creditworthiness of the enterprises. Healthy cash flow systems, both inward and outward, are lifeline to any business. Badly managed credit systems pose significant risks to the business. It is even more so for businesses that are relatively small and that do not achieve economies of scale.
Recognizing this issue, successive governments have introduced suitable measures to overcome these difficulties in the flow of credit to MSMEs. Despite such measures, MSMEs still remain susceptible to any crisis and the COVID-19 pandemic has exposed the financial vulnerability of the MSMEs.
In today’s story, we look at one such measure introduced by the Government of India to ease the liquidity constraints on MSMEs due to the COVID-19 pandemic. We also look at previous initiatives of the Government in this regard.
MSMEs and flow of credit
There are primarily two sources of credit availability to MSMEs- institutional and non-institutional. Institutional credit is led by the RBI and other agencies mandated by the RBI, while the non-institutional credit is majorly sourced from money-lenders and family and friends. The percentage of MSMEs using institutional credit remains low, because of the high-risk perception of banks in extending credit facilities to MSMEs, and this is more acute in the case of micro and small enterprises.
To ease the flow of credit to MSEs, the Government of India had introduced the Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE). A trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was established with contribution in ratio of 1:4 by the Small Industries Development Bank of India (SIDBI) and the Government of India (GoI). The details of the eligibility of lending institutions, credit facilities, guarantee cover, and term of the guarantee can be accessed here.
Consistent rise in the amount of guarantee approved under CGMSE.
Under the Credit Guarantee fund scheme for MSEs, the amount of guarantee approved has shown consistent increase, with few exceptions. The number of member lending institutions has also increased, after a brief decline during 2017-19. The average size of the loan issued fell from Rs. 5.27 lakh in 2014-15 to Rs. 4.41 lakh during 2016-17. During 2017-18, it rose to Rs. 7.24 lakh, thereafter which it declined gradually to Rs. 4.42 lakh in 2020-21. In 2021-22, it increased again to Rs. 7.83 lakh.
Since 2017, CGTMSE has experienced fundamental changes that have allowed it to broaden the scope of its programmes to include untapped markets including partial collateralized loans, retail trade, and untapped lenders like NBFCs, small finance banks, and scheduled cooperative banks.
Emergency Credit Line Guarantee Scheme (ECLGS)
COVID-19 pandemic and the subsequent containment measures had an adverse impact on the financials of the MSMEs. They were struggling with liquidity constraints to keep the enterprise running, and many of them were on the verge of bankruptcy and insolvency. To mitigate the liquidity constraints, the Government of India introduced the ECLGS scheme in May 2020. Under this, 100 percent guarantee is extended to the member lending institutions (MLIs) in respect of credit extended by them to the borrowers. The interest rate under the scheme is capped at 9.25 percent for Banks and Financial Institutions and 14 percent for Non-Banking Financial Institutions. The overall ceiling initially announced for ECLGS was Rs. 3 lakh crore which was subsequently enhanced to Rs. 4.5 lakh crore.
Initially restricted to MSMEs, the scheme was subsequently expanded to cover other sectors. So far, four extensions have been made. The four extensions done are as below.
A study conducted by the SBI Research team concluded that the ECLGS scheme saved 13.5 lakh MSME units, 1.5 crore jobs and prevented 14% of the outstanding MSME loans turning into NPA.
How is ECLGS is different from CGTMSE?
Though CGTMSE and ECLGS are guarantee schemes by the Government, there is a significant difference in their characteristics. CSTMSE came into force from 01 August 2000, while ECLGS was launched during the COVID-19 period, i.e., 2020. Apart from this, below is the gist of the differences.
Performance of ECLGS
As mentioned earlier, since the inception of the scheme in May 2020, it has been extended four times to cover various sectors. This must be kept in mind when looking at the data on the amount and the number of guarantees issued under this scheme.
As on 30 August 2020, the scheme provided guarantees worth Rs. 1.08 lakh crore to 0.24 lakh beneficiaries. The amount rose to Rs. 1.63 lakh crore and beneficiaries increased to 0.42 lakh as on 09 September 2020. Till November 2020 (ECLGS 1.0), the scheme was restricted to MSMEs and other businesses with an outstanding up to Rs. 50 Crores.
As on 02 July 2021, the amount guaranteed increased to Rs. 2.73 lakh crore, and the number of beneficiaries stood at 1.14 lakh. As per the latest data as of 30 November 2022, the amount guaranteed under this scheme increased to Rs. 3.58 lakh crore, while the number of borrowers benefitted improved to 1.19 lakh. The data for these two dates includes data of all the extensions of the scheme, from ECLGS 1.0 to ECLGS 4.0.
Five states account for half of the amount guaranteed under ECLGS.
The cumulative amount guaranteed under the ECLGS scheme grew by more than 200% between 31 August 2020 and 30 November 2022. The state wise growth of the amount guaranteed is not uniform. As of 30 November 2022, around five states namely Maharashtra, Tamil Nadu, Gujarat, Karnataka, and Uttar Pradesh accounted for half of the total amount guaranteed under ECLGS. The share of top ten states in the amount guaranteed rose from 71% in 2020 to 76% in 2022.
The average ticket size (ATS) of the loan is highest for Delhi with Rs. 22 Lakhs, while it is lowest for West Bengal with Rs. one Lakh as of 2022. Interestingly, Delhi has more medium-sized enterprises while West Bengal is dominated by micro-enterprises. Also, the effect of expansion of the coverage of ECLGS scheme is clearly visible in the trend in average ticket size of loan. For West Bengal, the ATS in 2020 was Rs. 4.4 Lakh, which reduced to Rs. 1 Lakh in 2022, while for Delhi, it grew from Rs. 13.8 Lakhs to Rs. 22 Lakhs during the same period.
Services and consumer durables account for 35% of the total amount guaranteed as of 2022.
The data on industry wise issue of amount guaranteed under the ECLGS shows that services industry and consumer durables/FMCG, corporate retail outlets and traders’ industry cumulatively account for 35% of the total amount guaranteed as of 30 November 2022. If textiles industry and hospitality, sports and leisure industry are also included, these four industries account for half of the total amount guaranteed.
Interestingly, the hospitality and consumer durables industry were not much significant in 2020, while they form a considerable proportion of amount guaranteed in 2022.
Impact of ECLGS has been positive so far.
The impact of the Emergency Credit Line Guarantee Scheme (ECLGS) has been studied in August 2022 by TransUnion CIBIL Ltd. As per the assessment, the following positives are observed in flow of credit as well as the change in behaviour of the borrowers.
One important observation from the study is the lower utilization of ECLGS in subsequent expansions than in the initial stage. It highlights that such lower utilizations despite expansion of coverage indicates the need for liquidity is higher among lower segments than higher loan segments.

created: January 24, 2023


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Data: Consumption of Chemical Pesticides is Not Reducing While The Use of Bio-Pesticides Increases Gradually
Sai Krishna Muthyanolla
January 3, 2023
Data provided by the government in the Parliament indicates that the consumption of Chemical Pesticides has not reduced in the country with the consumption averaging around 60,000 MT in the last nine years. On the other hand, the consumption of bio-pesticides has increased by more than 40% between 2015-16 and 2021-22 though their total consumption is less than 1/6th of the chemical pesticide consumption.
To ensure that agriculture production meets the increasing demand for food, pesticides are being widely used to protect crops from pests. While the availability of safe and efficacious pesticides and their judicious use by the farming community is critical to the long-term sustainability of agriculture, pesticides have also been identified as a key threat to the Sustainable Development Goals because of their potential to adversely affect the non-target species and the environment. Pesticide exposure is associated with cancers and neurological, immunological, and reproductive effects, among other health impacts on human beings. The excessive and inefficient use of these chemicals has also led to nutrient losses, drinking water contamination, and eutrophication of freshwater systems and coastal zones.
Apart from the direct consequences on humans and the environment, accidents are another consequence because of toxicity. In 2021 alone, the NCRB reported close to 8000 incidents of accidental Intake of Insecticides/Pesticides which resulted in the death of 7800 persons in India. Farmer suicides and corporate monopoly are some of the other issues linked to pesticides.
Pesticide consumption is also a topic of discussion in various global conferences related to sustainability and the environment. In COP 15 of the Convention on Bio-Diversity, the Indian Government expressed that a numerical global target for pesticide reduction is unnecessary and must be left to countries to decide since food security was important in developing states where agriculture is a primary economic driver for rural communities.
Consumption of chemical pesticide in India has increased over the decades
India being an agrarian economy, more than 40% of the workforce is employed in the sector thereby bringing the focus on agricultural development in the country’s planning and policy. India is among the leading producers and consumers of pesticides in Asia and the World. The consumption of pesticides in India increased several hundred folds from 154 MT in 1953-54 to 80,000 MT in 1994-95 with the Green Revolution being a major contributor. However, since then, the consumption steadily dropped to 54,135 MT in 1999-2000 because of the ban and restriction on the use of organochlorine pesticides and the introduction of the Integrated Pest Management programme.
In the last decade from 2012-13 to 2021-22, India’s consumption of chemical pesticides has been an average of 58,429.7 MT. Not including 2012-13 when the consumption was below 50,000 MT, the average consumption was 59,853.1 MT in nine years. The consumption was the lowest in 2012-13 with 45,619 MT and highest in 2017-18 with 63,406 MT consumed. Overall, the consumption has been more in the second half of the decade with an average of 61,138 MT as compared to 55,721 MT in the first half.
Maharashtra and Uttar Pradesh account for 40% of the chemical pesticides consumed in the country
Among states, Maharashtra is the largest consumer of chemical pesticides followed by Uttar Pradesh. With more than 10,000 MT consumed by each of these states annually, the two states alone contributed to 38% to 42.4% of the total chemical pesticides consumed in the country every year since 2015-16. Punjab is the third highest consumer with an average of more than 5525 MT consumed from 2015-16 to 2020-21. Punjab’s data for 2021-22 is not yet available. The three states together contributed 48% to 51% of the total consumption during the six years from 2015-16 to 2020-21.
Though Telangana and Haryana have an average consumption of more than 4000 MT in the seven years, the consumption in Telangana increased till 2017-18 and then stabilized while in Haryana, the consumption has been in the range of 4000 to 4100 MT in the same period. The states of Uttar Pradesh, Telangana, Jharkhand, and Odisha & Jammu and Kashmir have witnessed a gradual rise in consumption during the said period whereas states like Kerala and Andhra Pradesh reported a decline in consumption.
The northeastern states of Meghalaya and Sikkim were marked as ‘Organic States’ in the response provided in the parliament. Among the remaining northeastern states, consumption is mostly in Assam and Tripura.
Consumption of bio-pesticides is increasing
In recent years, the government is promoting the use of bio-pesticides through various schemes. The consumption of bio-pesticides at the national level was 6,148 MT in 2015-16 which rose to 8,898.92 MT in 2021-22. That is, in the last seven years, the use of bio-pesticides increased by close to 45%. Though there has been a continuous increase in biopesticide consumption, the quantity is still very less compared to conventional chemical pesticides. The percentage of bio-pesticides consumption as against chemical pesticides consumption stood at 15% in 2021-22, up from 10.8% in 2015-16.
Maharashtra, Rajasthan, and West Bengal account for one-third of the bio-pesticides consumption in India
Maharashtra was the major consumer of bio-pesticides until 2019-20. However, the state’s consumption has declined since 2016-17. From 1,454 MT in 2016-17 accounting for one-fifth of the consumption at the national level, the state’s consumption has dropped to below 1000 MT in the last two years. Its share in consumption has also dropped to 10.5% in 2021-22. Since 2020-21, Rajasthan has been the highest consumer of bio-pesticides, overtaking Maharashtra. West Bengal also consumed more than 1000 MT in the last 3 years. The three states continue to account for almost one-third of the country’s bio-pesticide consumption.
Rajasthan reported an almost 100 times increase in the consumption of biopesticides in the last seven years. The annual consumption was below 15 MT between 2015-16 to 2018-19 and jumped to 1268 MT in 2021-22 contributing to 14.2% of the national consumption.
A significant increase was also witnessed in the states of Telangana, Tamil Nadu, and Chhattisgarh. Meanwhile, the states of Kerala and Odisha witnessed a decline in consumption in the last 3-4 years. Despite being one of the largest consumers of chemical pesticides, Uttar Pradesh’s consumption of bio-pesticides has been very low. The state reported having consumed only less than 50 MT until 2020-21 and 50.88 MT in 2021-22. Though the state has witnessed an increase in usage, Andhra Pradesh has also reported 45 MT in 2021-22. The consumption in these two states is among the lowest among large states.
Government’s push towards sustainable agriculture
As per responses provided in the parliament, The central government promotes sustainable agriculture and encourages the use of biopesticides through organic farming schemes of Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value Chain Development for North Eastern Region (MOVCDNER). Educational programs are held for farmers to shift to eco-friendly products. ICAR and state agriculture universities are also working on developing biopesticides. To promote the judicious use of pesticides, Central and State Governments through their field agencies ensure that farmers are provided with the right knowledge/ information about recommended pesticide use. The Union Ministry of Agriculture and Farmers Welfare is also propagating the Integrated Pest Management approach through its 36 Central Integrated Pest Management Centres located in 28 States and 2 UTs. However, as observed earlier, the high usage of chemical pesticides continues in many states.
Featured Image: Consumption of Chemical Pesticides

created: January 3, 2023


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Consumption of Petrol & Diesel down by more than 1/3rd in April-June quarter compared to 2019 while LPG consumption increases
Sai Krishna Muthyanolla
July 23, 2020
As expected, the consumption of petroleum products witnessed a steep fall in the April-June quarter of 2020 because of the nation-wide lockdown. The consumption of Diesel & Petrol was down by more than 1/3rd compared to 2019 while the consumption of LPG increased.
India recorded a monthly trade surplus in goods for June 2020, for the first time in 18 years. However, detailed analysis of the data reveals that that there is an overall contraction in the trade during the April – June quarter of 2020 than any real improvement in exports. The real reason for the trade surplus is contraction of trade. This period coincides with National wide lockdown imposed to mitigate the spread of COVID-19.
In an earlier story, we observed that fall in the import of Petroleum products is one of the main reasons for the close to 50% fall in the overall imports during June’2020.
In this story we look at the trends in consumption of petroleum products during the April-June quarter, which was the reason for the fall in imports.  The data used in the story is provided by the Petroleum Planning and Analysis Cell of the Government of India.
Consumption of Petroleum Products during April-June quarter fell to 2013 levels
The total consumption of Petroleum Products during the period April-June’2020 was 408.91 lakh metric tonnes (LMT). This is the lowest since 2013, when 404.39 LMT of Petroleum products were consumed during the same quarter.
Data indicates that over the 10-year period 2011-2020, there has been a consistent year on year increase in the consumption of Petroleum Products during the April-June quarter. For the first time in 10 years, the consumption fell in April-June’2020.  The consumption during this quarter in 2020, fell by around 1/4 compared to the consumption during the same time in 2019.
Sharp fall in the consumption of Petroleum Products during April’ 2020
A major reason for the fall in the consumption of Petroleum products during the April-June quarter can be attributed to the sharp fall in the consumption during April’2020  corresponding to the same month in 2019.
In April’2020, the consumption was 99.35 LMT, which is just around 54% of 183.22 LMT consumed during April’2019. The consumption in April’2020 is back to levels of April’2006 largely on account of the complete lockdown in the country.
Though not as steep a fall as in April, the consumption for May & June’2020 are also lower than the consumption during the same months in 2019. The consumption in May & June was at 2014 and 2016 levels respectively.
The signs of fall in consumption of petroleum products were visible in March’2020 when the consumption fell to 160.83 LMT from 195.64 LMT during March’2019.
The consumption trends can be correlated to the timeline of imposition and relaxation of the nation-wide lockdown.
Consumption of Diesel fell by 33% in April-June 2020 compared to the previous year
Among various petroleum products, HSD (High Speed Diesel) has the highest consumption and traditionally forms around 40% of the total share. For the quarter April-June ‘2020, the consumption of HSD was 150.6 LMT, which is 33% less than the consumption during the same quarter in 2019 when it was 225.63 LMT. The quarterly consumption of HSD is least during these months over the past 11 years.
The overall trajectory of consumption during this quarter is upwards over the last 10 years barring 2020.
The fall in the quarterly consumption during this period was salvaged to an extent by the increase in May & June’ 2020 compared to that of April’2020.
Only 32.55 LMT of HSD was consumed in April’2020 compared to that of 73.23 LMT in April’2019. Although the consumption increased in May & June’2020, it is still lower than the consumption during the same months in 2019. The numbers for May’2020 are also the least in 10-year period, while June’2020 numbers were at 2016 levels.
The fall in consumption is also observed for March’2020, where in it was 56.5 LMT in March’2020 compared to 74.9 LMT in March’2019.
Consumption of Petrol fell by 60% in April’2020 compared to the last year
Motor Spirit (Petrol) is another major petroleum product consumed in India. The consumption during April-June’2020 was 50.24 LMT compared to 78.35 LMT during April-June’2019. The consumption during this quarter is the lowest since 2015 when it was 53.85 LMT while 47.96 LMT were consumed in 2014.
The numbers for April’20 indicate a sharp decline of over 60% compared to April’2019. The consumption has increased in the subsequent months with the consumption in June’2020 reaching nearly the 2018 levels.
No fall in LPG consumption during April-June’20
Unlike Diesel and Petrol which have seen a steep fall in consumption during April-June’2020 compared to last year, the consumption of LPG has increased during this quarter compared to the same period in 2019.
Consumption of LPG during this quarter of 2020 was recorded at 65.19 LMT, more than the  57.48 LMT recorded during this quarter in 2019. The increase in consumption during this quarter is also the highest in over 10 years.  All the three months individually recorded an increase in consumption in 2020 compared to 2019.
Petroleum Coke consumption fell by nearly 30%
Petroleum Coke is used in certain industries as an energy alternative. India has earlier banned the import of petroleum coke in August 2018 in view of pollution concerns, but has later relaxed the restrictions.  An effect of this can be observed in the gradual fall in the consumption of Petroleum Coke since 2018. However, the reduction observed in April-June’2020 compared to the same quarter in 2019 is significant. The consumption for this quarter in 2020 was 42.05 LMT, while in 2019 it was 58.68 LMT.
The fall in consumption is especially significant  for April’20 where in it was 11.11 LMT compared to that of 22.54 LMT  in April’2019. The reduction in the consumption can be attributed to the lockdown rather than to the ban, since the consumption in months prior to April’20 was at par with the consumption figures of 2019.
Fall in the imports of Petroleum products due to the steep fall in consumption
The fall in the imports especially that of petroleum products in June can be correlated to the fall in the consumption of various petroleum products during the quarter of April-June’2020.
Commercial transportation of goods as well as movement of people using vehicles has been limited during the nation-wide lockdown, which is reflected in the fall in consumption of both diesel and petrol compared to last year. The proportionately higher fall in Petroleum Coke consumption can also be attributed to the lack of industrial activity during the lockdown.
Consumption of LPG is an exception. Though the closure of restaurants & eateries  could have reduced the consumption of commercial LPG, it is more than compensated by the increased LPG consumption in households during this period.
These trends clearly indicate that fall in petroleum imports is due to the steep fall in consumption rather than any domestic substitution. With the lockdown norms eased across the country and the increasing trend of consumption, as observed in June’2020, the consumption of these products may reach the pre-lockdown levels in the months to come. This in-turn can result in increase of the imports, thereby tipping the trade balance towards deficit as earlier.
Featured Image: Consumption of Petrol & Diesel


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Data: Consumption of Petrol picks up in Q2 of 2020-21, but not Diesel
Sai Krishna Muthyanolla
October 22, 2020
The data for consumption of petroleum products indicates that the overall consumption of petroleum products has slightly improved in Q2 of 2020-21 compared to the first quarter. While the consumption of Petrol has picked up during July to September 2020, the consumption of Diesel is yet to get to back the pre-lockdown levels.
In an earlier story, we looked at the trend in consumption of petroleum products during the first quarter of financial year 2020-21, which was also the time when the nationwide lockdown was imposed. We had also observed that there was a fall in imports, of mainly petroleum products, during the first quarter of 2020-21 on account of reduced demand. Industrial activity, vehicular movement, and other economic activities were severely restricted during the lockdown months. However, in the second quarter of 2020-21 from July to September 2020, the restrictions in most of the sectors were eased, and economic activity has picked up. We look at the consumption of petroleum products during the second quarter of 2020-21 and analyse if the demand has picked up.
The data for this story is collated from the Petroleum Planning and Analysis Cell (PPAC) of the Government of India. PPAC’s mandate is to analyse the trends in the international oil market and domestic prices, forecasting and evaluation of petroleum import and export trends.
Consumption of petroleum products in Q2 of 2020-21 is 11.3% lower than in Q2 of 2019-20
As is evident from the subsequent chart, the total consumption of petroleum products such as petrol, diesel, petroleum coke, LPG, bitumen, Naphtha, and other petroleum products in the second quarter of 2020-21 (from July to September 2020) has reduced by over 11.3% compared to the same period in 2019-20. Similar trend is observed in the monthly consumption for July, August, and September 2020.
The overall consumption in Q2 of 2020-21, was around 455 lakh metric tonnes (LMT) which is less than the consumption during July to September 2016 when it was around 473 LMT. The consumption in September 2020 is around 155 LMT, the lowest in the last four years.
The consumption in July 2020 had dropped by 13.3%, and in August 2020 by 15.8% over the corresponding months in 2019. In the month of September 2020, the consumption dropped by 4.47% compared to 2019, implying that the consumption may be on the recovery path.
Consumption of LPG has increased in Q2 of 2020-21
The overall consumption of petroleum products in Q2 of 2020-21 is lower than the consumption during the same period in 2019-20, which looks like the continued impact of the lockdown during Q1 of 2020-21.  However, the consumption trend has improved compared to the first quarter of 2020-21.
Comparison of the product wise consumption in Q2 of 2019-20 and 2020-21 indicates that consumption of Petrol has reduced by 5%, Diesel by 15.7%, and petroleum coke by 16.3%. However, the consumption of LPG has increased marginally. These four products alone account for three-fourth of the consumption of petroleum products in Q2 of 2020-21.
Diesel consumption is yet to recover
The demand and consumption of Diesel has been constantly increasing over the years as it fuels the trucks, trains, buses, and major industrial activity. With the growth in economy, the consumption of Diesel has also grown.  Traditionally, Diesel accounts for almost two-fifth the consumption of all petroleum products in India.
Compared to 48.5 LMT in August 2020,  the consumption of Diesel increased to 54.9 LMT in September 2020. However, the consumption was still lower than that in September 2019 by nearly 6%. In fact, the consumption of Diesel in August 2020 was the second lowest in the last 10 years.
The total consumption of 158.5 LMT between July & September 2020 is back to the 2014 levels when it was 157.6 LMT.
Consumption of Petrol in September 2020 is higher than that in September 2019
Unlike in the case of Diesel, consumption of Petrol in the month of September 2020 has increased by 3% compared to September 2019. But the overall consumption in Q2 of 2020-21 (July to September 2020) is lower than that in Q2 of 2019-20.
The demand for Petrol was more or less back to pre-lockdown levels in September 2020. The consumption of Petrol September 2020 (24.5 LMT) is the highest in the month of September in the last ten years.
The difference in consumption patterns of Petrol & Diesel can be gauged by the fact that the consumption of Petrol during July to September 2020 reduced by around 5% compared to the same months in 2019 while the drop in the case of Diesel is 15.6%.
Consumption of LPG has increased
Unlike the other petroleum products, the consumption of LPG had increased even when the lockdown was in force. In quarter one of 2020-21, from April to June 2020, the consumption of LPG had increased by over 13.3% as compared to the corresponding period in 2019-20. Similarly, even in Q2, the consumption of LPG has increased from 67.85 LMT in Q2 of 2019-20 to 68.05 LMT in Q2 2020, the highest in the last ten years. This could be due to a significant increase in domestic LPG demand as eating out has reduced.
Consumption of ATF and coke is yet to pick up
Apart from Petrol, Diesel, and LPG which are used even by retail consumers, the consumption of coke, which is widely used in industries as an energy alternative has dropped significantly in the months of August and September in 2020 compared to the same months in 2019. However, there has been an overall decline in its consumption since 2017 due to restrictions imposed in its usage out of pollution concerns. Consumption of Aviation Turbine Fuel (ATF),  used by airlines and helicopters has improved compared to the previous months as the aviation sector opened up.  However, ATF consumption in the last three months is not on par with the consumption of previous years since airlines have started only partial operations.
Increased use of private vehicles may have increased the demand for Petrol
One probable reason for the increase in the consumption of Petrol may be the increased usage of private vehicles. Public transport like buses & trains have not resumed in full capacity in most places. Also, it looks like people have preferred the use of private vehicles than public transport since the risk of infection is lower.
Since public transport & other economic activity have not fully resumed, the consumption of Diesel has not yet recovered and back to the pre-lockdown level. Since the price of diesel, which was once significantly less than that of petrol, is now on par, the demand of Petrol fuelled vehicles could also be a reason behind the contraction in the demand for diesel.
India is third largest consumer of oil in the world
According to the World Energy Outlook 2020, published by International Energy Agency, India will lead the energy demand in the world over the next ten years. India currently is the third largest consumer of oil in the world after USA and China, as per 2018 figures.
As per a response of the government in Lok Sabha,  it has been pushing for the use of green and clean fuels. The CNG gas coverage has been increased. The Railways Ministry made an announcement this year that the railways would be fully fuelled by electricity by 2024. Further, the government is also taking measures to shift to hydrogen fuel cell powered public transport.
While the government is working towards reducing the dependence on imports to meet the domestic demand for oil, the unprecedented variation in demands and consumption of these fuels pose a challenge to the refineries.

created: October 22, 2020