Punjab’s path to make direct power subsidy transfer won’t be easy
CHANDIGARH : The Punjab cabinet on Wednesday took an in-principle decision saying the government will provide direct benefit transfer (DBT) of power subsidy to farmers for using agriculture tubewells.
The decision will put an end to the existing system of giving in advance a lump sum amount to the Punjab State Power Corporation Limited (PSPCL) for the electricity consumed by 14 lakh tubewells every month as no bill is charged from the farmers.
The discussions were going on for many years to adopt the DBT but the successive governments found it difficult to make any changes to the prevailing system apprehending opposition from not only farmers but also opposition parties.
HT takes a look at the issue:
WHY DBT TO FARMERS
DBT is seen as a step in bringing transparency in the disbursal of subsidies and also ensure that complete benefit reaches the end-beneficiary, without any leakage. The Narendra Modi government at the Centre has been proposing DBT for all kinds of subsidies to farmers. Besides, DBT of power subsidy will contribute towards fiscal easing for the state government.
WHAT IT MEANS
Other than fiscal gains to the state government, it would mean transfer of a fixed amount of cash in the pockets of farmers as well as saving environment by curtailing unregulated use of subsoil water and electricity. Besides, it would make farmers more accountable for the electricity they are using as billing will be done o the basis of power consumed by tubewells.
BACKGROUND OF THE ISSUE
The populist move was started when Rajinder Kaur Bhattal became Punjab chief minister for short time in 1996. The Congress government announced free power for farmers having up to 5BHP horsepower tubewells. Then it was ₹809 crore subsidy bill, which this year has ballooned eight times to ₹6,277 crore. It became a major poll plank for the AkaliBJP alliance ahead of the 1997 polls, as it announced free power for all tubewells. Free power is seen as a contributing factor towards fall in subsoil water level, as water table fall is more than the recharge.
GOVT’S INABILITY TO PAY BILLS
In the last five years, the state government has been unable to pay the subsidy amount to the PSPCL in time, with the bills rising each financial year. “Taking of a decision on DBT required a strong will and its implementation needs foresight. I have been asking the government to implement DBT,” said farm economist Sardara Singh Johl.
HOW DOES IT BENEFIT FARMERS
Experts say there are two ways of implementing DBT — either by transferring tubewell-wise subsidy by calculating total power consumption and dividing it by 14 lakh tubewells. Another way is dividing subsidy among the owners of the total acres under cultivation. “If the scheme is implemented in true spirit, the farmers will get good amount of cash in hand,” said Johl.
WHAT IT MEANS FOR PSPCL
The PSPCL apprehended that on DBT implementation, farmers will refuse to pay bills. “It could lead to litigation and loss of revenue,” said a senior official in the corporation. At th same time, the PSPCL sees it as an opportunity to collect revenue directly from owners of at least 14 lakh tubewells. As per the Punjab State Electricity Regulatory Commission (PSERC), PSPCL can’t mix its transmission and distribution losses with agriculture tubewell consumption.
WHY FARMERS ARE WARY
“We doubt the intentions of the government. It’s beginning of an end to free power to agriculture tubewells,” said BS Rajewal, who heads a farmer union. This was the little help the government was giving to the farmers who are in debt but now they will be left in the lurch, he claimed.
CHALLENGES GOVT WILL FACE
After the announcement of the decision, the state government apprehends a stiff opposition from farmers who comprise a major portion of the state’s population. Adding to the worry is the state farmer unions that look for issues to fuel their “movements”. Farmer bodies have threatened an agitation and the opposition SAD has decided to hold an emergency meeting of the party’s core committee on May 30.