Farm electricity dues have soared to Rs 32,000 cr, state plans to shift farm consumers to solar power

Out of the total project cost of Rs 240 crore, the Centre and the state will bear Rs 50 crore and Rs 12 crore, respectively, said Bawankule.

| Mumbai | Published: October 4, 2018 3:04:55 am
Rooftop solar tariffs drop to lowest-ever in Madhya Pradesh auction Under the Centre’s ASKP scheme, which will cost a total of Rs 240 crore, marginal farmers, owning less than 5 acre land, who are still waiting for an electricity connection, will be eligible for a three horse power solar pump Express photo

The Maharashtra government, which is struggling to recover the mounting farm electricity arrears, has now planned to shift all its agricultural consumers to the solar grid.

Maharashtra’s Power Minister Chandrasekhar Bawankule said that this would be achieved within the next five years. As part of the same initiative, the state cabinet on Wednesday approved a scheme for the distribution of 7,000 solar pumps to farmers at subsidised rates under the centrally-sponsored Atal Solar Krushi Pump (ASKP) scheme. In the same meeting, Chief Minister Devendra Fadnavis also directed the energy department to formulate a state-sponsored scheme on similar lines to cater to another 1 lakh farmers.

Under the Centre’s ASKP scheme, which will cost a total of Rs 240 crore, marginal farmers, owning less than 5 acre land, who are still waiting for an electricity connection, will be eligible for a three horse power solar pump on payment of barely five per cent (Rs 12,000) amount of the pump, while those owing bigger farmlands will be entitled for five horse power pumps on payment of Rs 30,000. While the Centre will bear 30 per cent of the cost of the pump, the state government would also contribute to it.

“Farmers will have to pay around Rs 30,000 for a solar pump which usually costs above Rs 2 lakh. The subsidy will be borne together by the state and the central governments as well as the exchequer,” said a senior official from the energy department.

Out of the total project cost of Rs 240 crore, the Centre and the state will bear Rs 50 crore and Rs 12 crore, respectively, said Bawankule.

While the beneficiaries will be expected to pool in another Rs 11 crore, Bawankule said that the Maharashtra Energy Development Agency (MEDA), the project’s nodal agency, will contribute Rs 100 crore, while the remaining Rs 67 crore will be raised through additional taxes on electricity, Bawankule said.

Bawankule further indicated that Rs 3,000 crore will be needed for a similar state-sponsored scheme, the financial model for which is still being worked out. He, however, indicated that it could involve an increase in the present taxes on electricity.

Farm electricity arrears in Maharashtra are among the highest in the country. Bawankule confirmed on Wednesday that they had mounted to Rs 32,000 crore, with principal dues itself crossing Rs 20,000 crore. Despite repeated amnesty measures announced by the government, it has been unable to recover farm dues.

Bawankule admitted that in four years, the state-run Maharashtra State Electricity Distribution Company has been able to recover just 2 per cent of the dues, which has compounded the commercial woes in the power sector for the government.

While the solar pumps, under the ASKP and the state-sponsored scheme, will be distributed among those whose farms are yet to be electrified, Bawankule also said there was a plan to shift the existing agricultural consumers to the solar grid through projects being commissioned or proposed under the Mukhyamantri Saur Krishi Vahini Scheme.

The government is hoping that the proposals sanctioned on Wednesday and those in the pipeline will ease the burden on the distribution company, and would also facilitate providing electricity during day hours to the farmers. At present, the distribution company caters to around 45 lakh farm consumers. Another 2.18 lakh farmers have applied for new connections, Bawankule confirmed.

Fearing a political fallout, the Maharashtra government has decided against severing farm connections with mounting dues. On Wednesday, Bawankule said, “We won’t discontinue their connections at any cost. But we are making another appeal to the farmers to pay at least a part of principal dues. Even a payment of just Rs 2,000 will do,” he said.

Farm electricity is supplied at highly subsidised rates in Maharashtra. Even as it costs Rs 6 per unit to supply the electricity to farm lands, the government levies just Rs 1.6- Rs 1.8 per unit from the farmers. The Central government had first launched the ASKP scheme back in 2016. While Maharashtra had initially announced distribution of 10,000 solar pumps under the scheme, it has so far achieved disbursal of 5,650 units. “The scheme has been modified. Earlier bidding for the solar pumps had not garnered favourable response. The competitive bidding criteria have been tweaked. Instead of the state distribution company, MEDA has now been appointed the implementation agency,” an official said. With farmers availing these solar pumps, the energy department is also hopeful of reducing its cross-subsidy burden by Rs 63 crore.

Meanwhile, the cabinet on Wednesday also slashed electricity tariffs for laundry services and the washermen community.

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