Transmission, supply losses part of farm power subsidy
It’s as per HERC norms, says Power Dept
Ruchika M. Khanna
Tribune News Service

Chandigarh, December 20
The Haryana Power Utilities is allegedly using the farm subsidy component to cover up its huge transmission and distribution losses. It is believed that almost two-thirds of the farm subsidy bill of Rs 2,800 crore allegedly makes up for the losses incurred by the two power distribution companies. This has meant that Haryana now pays the highest power subsidy to the farm sector in the country --- more than even Punjab, where power is provided free of cost to farmers.

Though the Power Department denies that their losses are bridged with the power subsidy to farmers, a study conducted by the Agriculture Department suggests that there is overbilling by almost five times in calculating the farm subsidy. Even the state finance minister, Birender Singh, says the transmission and distribution losses are being passed on as power subsidy, which is causing a huge revenue loss to the state exchequer.

The Power Department, however, contends that the subsidy component has been fixed in accordance with the norms laid down by the Haryana Electricity Regulatory Commission (HERC), after it fixed the number of hours for which power has to be supplied in both the kharif and rabi sowing seasons. “The huge power subsidy bill is on account of the unprecedented year-on-year growth of 20 per cent in power consumption in the agricultural sector, rather than because of the clubbing of losses with the farm subsidy,” says a senior official.

This year, Haryana has earmarked Rs 2,800 crore for power subsidy to the farm sector for the year 2008-09. Even Andhra Pradesh, which earlier had the highest power subsidy bill in the country, has earmarked Rs 2,385 crore for free power supply to farmers. From Rs 400 crore six years ago, it is a seven-fold leap for Haryana, which is paying an average of Rs 40,000 per tubewell for the nearly 4.70 lakh tubewells in the state.

Haryana, unlike neighbouring Punjab, does not dole out free power to farmers, but subsidises it at 25 paise per unit. Punjab is paying around Rs 2,300 crore for power subsidy this year, besides giving free power.

The Finance Department had earlier come up with a proposal of paying direct subsidy to the farmers. Birender Singh says that direct power subsidy, once introduced, will reduce the transmission and distribution losses which are passed on as power subsidy by the state power utilities.“Direct power subsidy will help reduce the power subsidy burden. We had asked the Power Department to examine how this could be implemented, but nothing has been done so far for its implementation,” he rues.

The Power Department, however, says that this will not be possible till the time all tubewell connections in the state are metered and the exact amount to be given to farmers can be worked out. At present, 60 per cent of the tubewells are unmetered, making it difficult to fix a basic slab of entitlement to subsidy. “Though we have asked the UHBVN and the DHBVN to have a pilot study on how direct subsidy can be given, it is difficult as the farmers getting unmetered power are not willing to get meters installed,” says an official. The solution, say officials of the Power Department, lies in segregating the rural domestic and agriculture feeders.