Just 15 years after Manmohan Singh, as Congress Prime Minister, openly spoke out against the free power supply scheme for farmers, the Bharatiya Janata Party (BJP)-led central government is trying to do away with the much-abused scheme that has been viewed by political parties as a major voting-catching policy measure. This time, the Center has stipulated that the Free Power Supply Scheme should be replaced by the Direct Benefit Transfer (DBT) as a condition for allowing States to increase their borrowing limits. It is not the first time that the Government of the Union has approved DBT for electricity. But what's new is to set the time frame for its implementation. The DBT should be launched in at least one district of the State by December of this year and a full roll-out should be made from the next financial year.
Predictably, Tamil Nadu, the first State to establish free power in September 1984, is strongly opposed to the Centre's stipulation. Chief Minister Edappadi K. Palaniswami was categorically opposed to the proposal. Although the chief ministers of Andhra Pradesh , Telangana and Punjab, where the system of free power is in vogue, have yet to express their views, it is not difficult to predict their response.
After all, Punjab Chief Minister Amarinder Singh, who had abolished the scheme during his first innings, is now a strong votary of the scheme.
Power subsidy bills
In the last 15 years, Maharashtra has been the only country to have scrapped the scheme within a year of its introduction. Karnataka, which has been implementing it since 2008, may become the first Southern State to have DBT in power supply, if any indication is given by Chief Minister B.S. Yediyurappa at the beginning of March. The power-subsidy bills in the four Southern States and Punjab are at least 33,000 crores, an amount that governments will struggle to meet due to a resource crunch in the light of the COVID-19 pandemic.
Apart from financial stress, the universal application of the scheme has had harmful consequences. In particular, the scheme has contributed to extensive waste of water and electricity. It is fundamentally opposed to motivating even a responsible farmer to protect the two precious resources. It may be fitting to point out that India is the largest user of groundwater at 251 billion cubic meters above the combined withdrawal of China and the United States, as pointed out by Bharat Ramaswami of the Indian Statistical Institute last year. Second, be it parts of the Cauvery delta in Tamil Nadu or the Sangrur district of Punjab, the story of the groundwater table is the same — a alarming rate of depletion. There's just one more attendant question. Farmers need to switch to submersible or high-capacity pump sets to sustain their activity.
Third, the extension of the scheme to different States over the years has only encouraged the installation of more pumps. Karnataka is a classic example, The number of irrigation pumps, which was around 17 lakh 12 years ago, is now around 30 lakh. Fourth, there is a misuse of the system, for which not only a portion of farmers but also field officials are to be blamed. And, fifthly, in the absence of meters for such connections or separation of feeders or metering of distribution transformers, accurate measurement of consumption is tricky. Those in charge of power distribution companies find it advantageous to reduce their aggregate technological and commercial losses by racking up a portion of energy consumption losses in the agricultural sector.
Argument for free power
Proponents of the free power scheme have a number of valid points in their support. Apart from ensuring food security, free power provides a means of livelihood for landless workers. When farmers who rely on canal supplies get almost free of charge water, it is fair that those who are not protected by canal irrigation should be given free electricity. While there is substance to the claim, it is not difficult to arrive at a rational pricing method. Small and marginal farmers, and those outside the canal, deserve free power, albeit with restrictions, but there is no justification for perpetually continuing the scheme for other farmers. However, those who enjoy free power need to be told about the need for sound use of groundwater and how to conserve it.
Taking advantage of the situation created by the COVID-19 pandemic, the Center is trying to make lasting changes to areas where such measures have been delayed for a long time. At least in the area of power sector, its attempt can yield meaningful results only if there is a change in the mindset of agriculturists and political parties towards the concept of free power.
