Harnessing social capital to achieve social development goals: collective action for fuel transition among urban poor in India

Abstract

A significant percentage of the urban population in India, mostly the poor living in slums, still use conventional cooking fuels which have adverse impact on health as well as environment. Though liquefied petroleum gas (LPG) for domestic cooking is subsidized, poor households still do not change over to it because of its high upfront cost. A pilot project was initiated to explore the viability of a community-based cooperative solution in pooling financial resources to meet the upfront cost and thereby to enable slum households to make the transition from firewood and kerosene to LPG.

Keywords:

• social capital
• collective action
• fuel transition
• subsidy

Acknowledgements

This article is an outcome of a larger collaborative research project ‘Climate and Energy in a Change Transition Process towards Hyderabad’ funded by the Federal Ministry of Education and Research (BMBF) under its Future Megacities Program. The authors acknowledge funding support and also research support of the project team, particularly of Ms Deepika, Ms P.R. Krithika, and Ms Richa Kapoor from TERI, Dr Christian Kimmich and Mr Julian Sagebiel from Humboldt University, and Mr MBS Reddy from APMAS for survey and pilot project. The usual disclaimer applies.

Notes

1. The Andhra Pradesh government launched the ‘Deepam’ scheme in 1999 for distribution of LPG connections to women belonging to women’s SHG from below-poverty-line (BPL) families in rural and urban areas. With an aim of covering 3 million households, this scheme was to cost Rupees 3 billion to the state government.

2. This survey was conducted in 2010 with a sample size of 800 households randomly selected from three different kinds of residential localities (upper class, middle class, and slums).

3. A trust game (Berg, Dickhaut, and McCabe 1995) was implemented in eight slums with groups comprised of 30 to 40 people (n = 270). In each slum, the players were divided into two groups of equal size: the sender group (group A) and the responder group (group B). The sender as well as the responder each received an initial endowment (x) of four Rupees 50 currency notes. Players in the sender (investor) group A could decide to keep the initial endowment or to send an amount of tokens y = {0, 1, 2, 3, 4} to an unknown player in the responder (trustee) group B. The amount kept immediately turned into a private yield of player A. The amount sent was tripled by the experimenters and then given to the trustee. Player B thus had his initial endowment (x) of Rupees 200 plus the tripled amount of tokens sent by the unknown player A (3y). Player B then decided how many tokens she wants to keep and if and what amount z = {0, 1, 2, …, 16} she wants to send back to Player A. All tokens kept, turned into private property of player B, all tokens sent immediately became private property of the respective player A. The amount sent (x) is used as a measure for trust, the amount returned (z) as a measure of reciprocity.

4. The dealers get a limited number of connections for release every month and most dealers stated that they had a long list of applicants. It is therefore easy for them to deny connections. Some dealers, for instance, argued that it was not wise to release connections to the poor for fear that they might re-sell the connections in the open market for a premium. The discussions, however, suggest that often the dealers prefer to sell the limited connections to commercial consumers such as hotels and restaurants (perhaps by recording bogus legitimate domestic consumers).

5. For instance, a two burner stove rather than a four burner stove. It was noted that while the various charges to be paid per connection are listed on a board by the dealers, some of the charges may not apply (for instance, inspection charge when the stove is brought from the dealer). Dealers also insist that the stove is bought from them, rather than from the open market, for reasons of safety.

6. The rules of the cooperation, like the amount to contribute or the distribution rule (lottery), were decided by the groups themselves.