At Rs 2,800 crore, Haryana tops chart of power subsidy to farmers
Cash-rich Haryana has earmarked Rs 2,800 crore for power subsidy to farm sector for the year 2008-09, surpassing even Andhra Pradesh, which has earmarked Rs 2,385 crore for free power supply to the farmers in its 2008-09 Budget presented this month. From Rs 400 crore six years back, it is a seven-fold leap for Haryana which is paying an average of Rs 40,000 per tubewell for the nearly 4.3 lakh tubewells in the state. Though Haryana, unlike neighbouring Punjab, does not dole out power free to the farm sector, but subsidises it at 25 paisa per unit. As a result, the farmer pays less than Rs 4,000 per tubewell to the power utilities and nearly 10 times the amount (Rs 40,000) is borne by the state Government. An estimated Rs 300 crore out of the Budget outlay of Rs 2,800 crore for power subsidy is due to the hike in the cost of generation and transmission of power, official sources in Dakshin Haryana Bijli Vitran Nigam (DHBVN) said. "The estimate for power subsidy for 2008-09 is Rs 2,800 crore, against Rs 2,132 crore last year. Though we are able to afford it, subsidies cannot go on endlessly,' said Haryana Finance Minister Birender Singh. "We are mulling over ways to reduce power subsidy burden. At a recent Cabinet meeting, we discussed the proposal of providing power subsidy directly to farmers instead of the power utilities, on the lines of Union Finance Minister's view on providing direct fertiliser subsidy to farmers. It will also help us adjudge the magnitude of transmission and distribution losses which are passed on as power subsidy by the power utilities of the state,' he added. Interestingly, Haryana, unlike Punjab, which was recently directed by its state electricity regulatory commission to clear subsidy arrears of the last few years, is also very prompt in making payments for the power subsidy to the power utilities, which are made twice in a month and even weekly. However, even after footing a huge subsidy bill, the state has failed to ensure that there are no defaults in payments by farmers. The present Congress regime had announced Rs 1,600 crore waiver for arrears of rural domestic and agriculture categories of consumers in the year 2005. "The waiver scheme was an effort to support the farmers to join the mainstream. It was not a blanket waiver, but one aimed at encouraging farmers to pay their current bills for 20 months without fail after which their arrears will be waived off,' says Haryana power secretary Ashok Lavasa. About 60 per cent of defaulting farmers have joined the scheme, which till the last review meeting of the power department, has generated close to Rs 350 crore for the state. However, according to a World Bank report on Haryana power subsidy, they are proving counterproductive for the farm sector, which has to endure the frustration and economic costs of supply that is both unreliable (not available at predictable times) and of poor quality (with fluctuating voltage).