Punjab government has spent Rs 40,538 crore for providing free power to farmers and other beneficiaries since 2002-03. The amount is more than the Centre's allotment for Mahatma Gandhi National Rural Employment Guarantee scheme in this year's Budget, reports Mohit Behl. According to a reply by the Punjab State Power Corporation Limited (PSPCL) to an RTI query, power subsidy approved by the regulator Punjab State Electricity Regulatory Commission (PSERC) in 2002-03 was Rs 950 crore, which went up to Rs 5,908.75 crore in 2015-16. P 3The major beneficiary of the scheme, which was started in 2002-03, has been the farmers while domestic consumers belonging to Scheduled Castes and below poverty line (BPL) categories are also exempted from paying the electricity bills.
PSPCL had received Rs 4,300 crore in power subsidy from the government till February 8, 2016 for the financial year 2015-16 out of the total approved amount of Rs 5,908.75.
During the past 13 years, PSERC has approved Rs 44,698.86 crore as subsidy for farm and residential consumers (SC and BPL) for PSPCL and the government paid Rs 40,538.58 crore towards it. In the Union Budget, finance minister Arun Jaitley had allocated Rs 38,500 crore for MGNREGA in 2016-17.
During the Congress regime in Punjab from 2002 to 2007, the total power subsidy bill was Rs 5,571.02 crore. Since 2007, the SAD-BJP combine has been in power in Punjab and the power subsidy bill under this government has ballooned by another Rs 39,127.84 crore. Since 2007-08, PSPCL has received Rs 34,967.56 crore from the government to offset its power subsidy burden.
Government's free power scheme is being condemned by other sectors, especially industry, and economists who allege that it was also hurting Punjab government's finances. Sources said gap in the income and expenditure of PSPCL had surpassed Rs 17,000 crore and it was also paying an interest of Rs 3,000 crore on the loans taken by it each year.
"I have been saying this for years that the way farm subsidy is being given will destroy both farmers and state's economy. We will see more disastrous results in coming days if this continues. Free electricity is leading to excess use of groundwater. Moreover, due to free power farmers get a very low minimum support price (MSP) for their crops. As a result, the beneficiary of this subsidy is the consumer not the farmer," said noted economist Sardara Singh Johl, chancellor of Central University of Punjab.
"We are not against supporting the farm sector on humanitarian and political grounds, but the way it is being done at present is going to destroy the state's economy. As a result burden is being put on the industry by charging a high tariff from us. I think the government should fix the amount of subsidy per acre and install meters so that excess usage can be charged," said Rahul Ahuja, executive member, Focal Point Shed Association, Ludhiana.