On Monday, The Royal Swedish Academy of Sciences described the Nobel-winning work of Abhijit Banerjee, Esther Duflo and Michael Kremer as a “new experiment-based approach” that has “transformed development economics”. Nothing better illustrates this description than the fields of Punjab, where Mumbai-born Banerjee and his wife Duflo have left their imprint on a popular incentive scheme to save power and water.
Designed in collaboration with the Abdul Latif Jameel Poverty Action Lab (J-PAL), a Massachusetts Institute of Technology-affiliated research centre co-founded by Banerjee and Duflo, the scheme virtually pays farmers for using less power — and hence, water — to irrigate their paddy and wheat crops.
‘Pani Bachao Paisa Kamao’ was launched last year as a pilot project by the Punjab State Power Corporation Limited (PSPCL) on six of the state’s 5,900 rural power feeders that cater to 14.16 lakh tube wells.
Official figures show that during last year’s kharif season, 173 farmers enrolled for the direct transfer payment scheme, saved around 1.75 lakh units of power and received about Rs 7 lakh. From October 21 last year to June 20 this year, farmers saved 2.17 lakh units and earned Rs 8.69 lakh. Then, in just two months, from June 21 to August 20, they saved 2.06 lakh units and earned incentives totalling Rs 8.24 lakh.
Today, the state government has extended the number of feeders for the scheme to 250, with the number of farmers more than tripling to 593 — with a long waiting list.
Solution lies in breaking it down
The solution to the big problem of global poverty lies in breaking it down to smaller and more precise questions about individual and group behaviour. Be in education or health, such research, with concrete results flowing out now, has redefined research in development economics.
A case in point is that of Karamjit Singh Rai, a 75-year-old farmer from Khusropur village in Jalandhar who was approached by PSPCL last year to avail the scheme. “I was suspicious at first, but they persuaded me to install an electricity meter on my 10-horsepower (HP) motor tube-well,” says Rai.
Under the scheme, Rai was entitled to a monthly consumption of 2,000 kilowatt-hours (200 units per HP) for four months from June 20 to October 20 last year, covering the period between transplanting and harvesting of paddy. That, at Rs 4 per unit, worked out to a cash payment of Rs 32,000.
But instead of 8,000 units, he consumed only 4,774 units of power during these four months for watering his seven-acre holding. On his power “savings” of 3,226 units, he “earned” Rs 12,904.
Hardip Singh (45) of Dhanoya village in Hoshiarpur, who was among the first to enroll for the scheme, earned Rs 5,000 from last year’s kharif season. Now, he is waiting for the incentive for this kharif season which is about to wind up.
Officials said the monthly quota for rabi crop was fixed lower — at 50 units per HP — because wheat is 4-5 times less of a water-guzzler than paddy.
“This is a big irrigation reform in a state like Punjab where the water level is going down at a rapid pace between 50 cm to 60 cm. We already have 82 outreach camps to educate farmers about the scheme,” said Baldev Singh Sran, chairman and managing director, PSPCL.
Back in the fields, Rai and Singh haven’t heard of Banerjee or Duflo, but their verdict on the scheme the duo pioneered is clear. “In my six decades of farming, I haven’t seen a scheme that pays us for something good,” Rai said.