Punjab CM urges big farmers to give up power subsidy

The Punjab Cabinet today approved a pilot research project on the Direct Benefit Transfer for Electricity (DBTE) for 990 agriculture consumers, aimed to save underground water.
Underlining the fact that the move would save the vital ground water resource, the chief minister also appealed to the big farmers to voluntarily give up their power subsidy to contribute to the government's efforts to check water depletion, said an official release.
Expressing serious concern at the receding ground water levels in the state, the Cabinet decided to try DBTE on a pilot basis as it could play a significant role in checking the decline in the water table although there was no monetary benefit to the State from the move.

Giving details of the cabinet decisions, an official spokesperson said that under the DBTE pilot project the Punjab State Power Corporation Limited (PSPCL) has tied up with J-PAL South Asia and the World Bank to evaluate DBTE for 990 Agriculture Pumpset (AP) connections.
Under the pilot project, the beneficiary farmers would be paid subsidy in cash, based on cost of power for irrigating the crops as finalised by experts from Punjab Agriculture University, Punjab State Farmers Commission along with Agriculture and Water Resources departments.
The farmers would be issued bills for electricity and allowed to retain the savings which is subsidy minus the bill amount.

Importantly, the move would not place any financial burden on the already beleaguered farmers; rather, it would incentivize monetary savings and conservation of water, the spokesperson stated.

The implementation of the DBTE scheme would help the state in promoting crop diversification, saving of precious ground water, accurate energy accounting resulting in rationalization of subsidy, checking Transmission & Distribution (T&D) losses, besides curbing of wasteful energy consumption.
The farmers, in turn, will be benefitted through regular income by saving electricity and promoting crop diversification.
In its other decision relating to power subsidy surrender by rich farmers, the cabinet decided to give such farmers the option to give up their AP subsidy by 50 per cent or complete subsidy which is 100 per cent, for which they would be charged Rs 202 per BHP per month or Rs 403 per BHP per month, respectively.

Voluntary surrender of power subsidy by agriculture consumers will reduce the subsidy burden of the state, which is providing eight hours of uninterrupted power supply during paddy season and 8-10 hours alternate day in non-paddy season to agriculture consumers in the state.
The entire amount on this account is borne by the state government in view of its declared policy for providing free power to Agriculture Pumpset (AP) consumers.
At present, there are around 13.50 lakh AP Tubewell Connections in the state. The subsidy to be paid by the state government to PSPCL in lieu of free power to AP sector is around Rs 6,000 crore for financial year 2017-18 and this burden is increasing every year.

The cabinet noted if one per cent farmers voluntarily opt to give up 50 per cent AP subsidy from this segment, it will reduce subsidy burden by Rs 35 crores per annum approximately. It was decided by the cabinet to encourage big farmers to voluntarily give up their power subsidy.
It is pertinent to mention here that the state has several rich and influential farmers who have agriculture land of 20 acres and even more, in contrast small and marginal farmers having agriculture land of 2 acres, 3 acres and 5 acres.
The chief minister has already set an example in this regard and had also appealed to all big and well-off farmers of the state to give up power subsidy voluntarily in the larger public interest, it said.