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Discuss in brief the system of free power to farmers in Punjab? How wo...

  Jun 23, 2020

Discuss in brief the system of free power to farmers in Punjab? How would Direct Benefit Transfer of power subsidy work? What are the issues involved?

  1. The Electricity Amendment Bill 2020, recently drafted by the Union power ministry to amend the Electricity Act 2003, is a big challenge lies ahead for the Punjab government, which has been providing free power to the agriculture sector. 
  2. The new bill has proposed providing subsidy on power to farmers through Direct Benefit of Transfer (DBT), which would be different from the prevailing ‘free power’ system. 
  3. Experts and farmers say that under the garb of DBT, it is a move to stop the free power supply to them. 
  4. At present, Punjab is supplying free power to 14.16 lakh electricity-run tubewells of the agriculture sector which are getting power through 5,900 Agricultural Pumpset Feeders (APFs). 
  5. These APFs are metered and the Punjab State Power Corporation charges the state government Rs 5.26 per unit for consumed units recorded in metered APFs. 
  6. There are no individual meters installed on every tubewell in Punjab, which is among the first states to separate agriculture sector feeders.
  7. Farmers are getting power supply for their Kharif and Rabi crops from these feeders as per the recommendations of the Punjab Agriculture University (PAU), Ludhiana. 
  8. It is supplied for around eight hours every day in Kharif season and four hours on alternate days during Rabi crop season.
  9. The state government pays around Rs 6,000 crore power subsidy bill to Punjab State Power Corporation Limited (PSPCL) every year under its ‘free power scheme’ to the farming sector.
  10. Under DBT, farmers will have to pay the bill for the power consumed for agriculture purposes. After that, they will get the subsidy in their bank accounts through DBT. A meter would be installed on every individual tubewell.
  11. In Punjab, the consumption per tubewell, having motors mostly with power rating between 7.5 and 12 HP (horse power), is 8,000-9,000 units. 
  12. So the annual power bill will come to around Rs 46,000 to Rs 48,000, and farmers are required to pay a bill of Rs 4,000 per month.
  13. In Punjab, 67 per cent farmers come under the small and marginal categories with 1-2 hectares land. Paying bills in advance is not possible for them due to debt.
  14. If farmers don’t pay their bills, the department will disconnect their connection, which could lead to several clashes in Punjab between PSPCL employees and farmers’ unions as well as power theft.
  15. This proposal should be tried in a pilot project and if results are encouraging, only then it should be included in the amendment bill.
  16. It is not feasible to provide meters on every pump set up across the country and then give cash subsidy every month after the consumer has paid the bill.