Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::index() - APP/Controller/ArtileDetailController.php, line 151
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
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Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

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        LATEST NEWS UPDATES | How to slash power subsidies by Ajay Shankar    </title>
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The irrationality and waste in energy subsidies in India has been a perennial theme in analysis of the Indian economy and in reform prescriptions. Progress has, however, turned out to be elusive in the face of ground realities and feasible..."/>
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                            <div style="text-align: justify"><br /></div><div style="text-align: justify">The irrationality and waste in energy subsidies in India has been a perennial theme in analysis of the Indian economy and in reform prescriptions. Progress has, however, turned out to be elusive in the face of ground realities and feasible politics.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry, after struggling for over a decade through repeated exhortations, had the satisfaction of getting a resolution in a Chief Ministers Conference in 2001 that free supply of electricity to farmers should be done away with. Nevertheless, 10 years later, the situation regarding free or, practically free, supply of electricity to farmers is practically the same. No chief minister seems inclined to touch the issue.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry has since given up and is now content with trying for compliance of the provision of the Electricity Act that requires the state governments to pay from the state budget for the subsidy involved in supply of power to farmers. Apart from the enormous strain on state budgets, this leads to waste of electricity through the widespread use of energy-inefficient pumps.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">What is worse, it leads to excessive watering and lowering of the groundwater table. Large parts of India are already experiencing depletion of groundwater and face the real prospect of a water crisis well before the consequences of climate change are felt.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">One of the practical technocratic approaches that has emerged and seems to have worked well in some states is the separation of power supply feeders for irrigation pump sets from those of rural settlements. While this involves some extra costs by way of additional and redundant infrastructure, it enables rationing of power supply for irrigation to meet actual needs of the crops being sowed. Such supply can also be given during off-peak hours when demand in the rest of the system is low.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">With this segregation, rural households can then be given power supply at par with urban areas in terms of both hours of supply and rates. For parity in hours of power supply, rural households would gladly pay normal urban rates. The private power company for Greater Noida tried this many years ago quite successfully. Parity in hours of supply would, at one stroke, enable Bharat to benefit from economic integration with India and the global economy.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry needs to use its leverage with the states and, even central funds, to persuade the states to adopt this approach. With increasing prosperity of a growing percentage of rural households, penetration of TV and other electrical appliances, revenues would rise and the subsidy burden for supply to rural households would decline. It would also be easier to have effective energy audit.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This would make it more difficult to pass off theft of electricity in urban areas as supply to agriculture, a widespread practice in many states. If supply to agriculture is efficiently rationed and restricted to off-peak hours and the electricity regulators implement the tariff policy that mandates lower rates for off-peak hours, the subsidy burden would come down substantially.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Attempts could then be made to persuade farmers in some villages to try out electricity consumption through smart cards. This would incentivise more efficient use of both energy and water. More energy-efficient pumps would be used and fields would not be unnecessarily flooded.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Like power supply to agriculture, kerosene oil subsidies have been a politically-sensitive issue. The large-scale diversion of subsidised kerosene oil for adulteration of petrol is well-known. The brave attempt by a public functionary to check this recently cost him his life and attracted a great deal of public attention. The rationale for kerosene oil subsidy in rural India has been the lighting needs of people: for cooking, they have access to firewood and cow dung cakes. Once evening supply of electricity to the habitation(s) in a village is assured, the justification for subsidised supply of kerosene to that village ceases to exist.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A village community through its Panchayat may gladly choose to agree to the discontinuation of the supply of subsidised kerosene if evening power supply is ensured. This would spare the political leadership at the state as well as the central level of the burden of deciding to do away with the kerosene oil subsidy; they would only be agreeing to what some villages may choose. Initial success could snowball.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficult part would be to supply electricity in the evening. At a macro level, ensuring evening power supply requires the elimination of peaking shortages and that has been an elusive goal. The problem would be less intractable as the number of villages opting initially for foregoing subsidised kerosene oil supply would not be many. The Centre can initially try out the programme in states that are, relatively speaking, comfortable in terms of power supply and have separated agricultural feeders from those supplying rural households.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The Centre can use a part of its unallocated quota of power from central generating stations as an incentive. Funds for local electricity generation from biomass and solar energy could be earmarked for these villages to augment grid supply and ensure evening power supply. Assured evening power supply would be the key to success. BPL households are, in any case, being given free power connections under the Rajiv Gandhi Grameen Vidyutikaran Yojana. For remote, scattered settlements, solar lanterns may be an appropriate option.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The savings from the kerosene oil subsidy may be enough to recover the cost of investments in local electricity generation and storage to ensure evening power supply. The elimination of kerosene oil subsidies with a far better quality of life for rural households across India would become a real possibility.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>(The author is member secretary of the National Manufacturing Competitiveness Council)</em></div><div style="text-align: justify"><br /></div>                                                           
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    <br><a href="http://economictimes.indiatimes.com/news/economy/policy/how-to-slash-power-subsidies/articleshow/11906582.cms" class="re" target="_blank">The Economic Times, 16 February, 2012, http://economictimes.indiatimes.com/news/economy/policy/how-to-slash-power-subsidies/articleshow/11906582.cms</a><div class="clear"></div>
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The irrationality and waste in energy subsidies in India has been a perennial theme in analysis of the Indian economy and in reform prescriptions. Progress has, however, turned out to be elusive in the face of ground realities and feasible..."/>
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                    <section class="cat-box recent-box innerCatRecent">
    <h1 class="cat-box-title">How to slash power subsidies by Ajay Shankar</h1>
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		 Published on</span><span class="text-date"> Feb 16, 2012</span>
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                            <div style="text-align: justify"><br /></div><div style="text-align: justify">The irrationality and waste in energy subsidies in India has been a perennial theme in analysis of the Indian economy and in reform prescriptions. Progress has, however, turned out to be elusive in the face of ground realities and feasible politics.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry, after struggling for over a decade through repeated exhortations, had the satisfaction of getting a resolution in a Chief Ministers Conference in 2001 that free supply of electricity to farmers should be done away with. Nevertheless, 10 years later, the situation regarding free or, practically free, supply of electricity to farmers is practically the same. No chief minister seems inclined to touch the issue.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry has since given up and is now content with trying for compliance of the provision of the Electricity Act that requires the state governments to pay from the state budget for the subsidy involved in supply of power to farmers. Apart from the enormous strain on state budgets, this leads to waste of electricity through the widespread use of energy-inefficient pumps.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">What is worse, it leads to excessive watering and lowering of the groundwater table. Large parts of India are already experiencing depletion of groundwater and face the real prospect of a water crisis well before the consequences of climate change are felt.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">One of the practical technocratic approaches that has emerged and seems to have worked well in some states is the separation of power supply feeders for irrigation pump sets from those of rural settlements. While this involves some extra costs by way of additional and redundant infrastructure, it enables rationing of power supply for irrigation to meet actual needs of the crops being sowed. Such supply can also be given during off-peak hours when demand in the rest of the system is low.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">With this segregation, rural households can then be given power supply at par with urban areas in terms of both hours of supply and rates. For parity in hours of power supply, rural households would gladly pay normal urban rates. The private power company for Greater Noida tried this many years ago quite successfully. Parity in hours of supply would, at one stroke, enable Bharat to benefit from economic integration with India and the global economy.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry needs to use its leverage with the states and, even central funds, to persuade the states to adopt this approach. With increasing prosperity of a growing percentage of rural households, penetration of TV and other electrical appliances, revenues would rise and the subsidy burden for supply to rural households would decline. It would also be easier to have effective energy audit.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This would make it more difficult to pass off theft of electricity in urban areas as supply to agriculture, a widespread practice in many states. If supply to agriculture is efficiently rationed and restricted to off-peak hours and the electricity regulators implement the tariff policy that mandates lower rates for off-peak hours, the subsidy burden would come down substantially.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Attempts could then be made to persuade farmers in some villages to try out electricity consumption through smart cards. This would incentivise more efficient use of both energy and water. More energy-efficient pumps would be used and fields would not be unnecessarily flooded.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Like power supply to agriculture, kerosene oil subsidies have been a politically-sensitive issue. The large-scale diversion of subsidised kerosene oil for adulteration of petrol is well-known. The brave attempt by a public functionary to check this recently cost him his life and attracted a great deal of public attention. The rationale for kerosene oil subsidy in rural India has been the lighting needs of people: for cooking, they have access to firewood and cow dung cakes. Once evening supply of electricity to the habitation(s) in a village is assured, the justification for subsidised supply of kerosene to that village ceases to exist.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A village community through its Panchayat may gladly choose to agree to the discontinuation of the supply of subsidised kerosene if evening power supply is ensured. This would spare the political leadership at the state as well as the central level of the burden of deciding to do away with the kerosene oil subsidy; they would only be agreeing to what some villages may choose. Initial success could snowball.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficult part would be to supply electricity in the evening. At a macro level, ensuring evening power supply requires the elimination of peaking shortages and that has been an elusive goal. The problem would be less intractable as the number of villages opting initially for foregoing subsidised kerosene oil supply would not be many. The Centre can initially try out the programme in states that are, relatively speaking, comfortable in terms of power supply and have separated agricultural feeders from those supplying rural households.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The Centre can use a part of its unallocated quota of power from central generating stations as an incentive. Funds for local electricity generation from biomass and solar energy could be earmarked for these villages to augment grid supply and ensure evening power supply. Assured evening power supply would be the key to success. BPL households are, in any case, being given free power connections under the Rajiv Gandhi Grameen Vidyutikaran Yojana. For remote, scattered settlements, solar lanterns may be an appropriate option.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The savings from the kerosene oil subsidy may be enough to recover the cost of investments in local electricity generation and storage to ensure evening power supply. The elimination of kerosene oil subsidies with a far better quality of life for rural households across India would become a real possibility.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>(The author is member secretary of the National Manufacturing Competitiveness Council)</em></div><div style="text-align: justify"><br /></div>                                                           
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    <br><a href="http://economictimes.indiatimes.com/news/economy/policy/how-to-slash-power-subsidies/articleshow/11906582.cms" class="re" target="_blank">The Economic Times, 16 February, 2012, http://economictimes.indiatimes.com/news/economy/policy/how-to-slash-power-subsidies/articleshow/11906582.cms</a><div class="clear"></div>
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        LATEST NEWS UPDATES | How to slash power subsidies by Ajay Shankar    </title>
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The irrationality and waste in energy subsidies in India has been a perennial theme in analysis of the Indian economy and in reform prescriptions. Progress has, however, turned out to be elusive in the face of ground realities and feasible..."/>
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                            <div style="text-align: justify"><br /></div><div style="text-align: justify">The irrationality and waste in energy subsidies in India has been a perennial theme in analysis of the Indian economy and in reform prescriptions. Progress has, however, turned out to be elusive in the face of ground realities and feasible politics.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry, after struggling for over a decade through repeated exhortations, had the satisfaction of getting a resolution in a Chief Ministers Conference in 2001 that free supply of electricity to farmers should be done away with. Nevertheless, 10 years later, the situation regarding free or, practically free, supply of electricity to farmers is practically the same. No chief minister seems inclined to touch the issue.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry has since given up and is now content with trying for compliance of the provision of the Electricity Act that requires the state governments to pay from the state budget for the subsidy involved in supply of power to farmers. Apart from the enormous strain on state budgets, this leads to waste of electricity through the widespread use of energy-inefficient pumps.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">What is worse, it leads to excessive watering and lowering of the groundwater table. Large parts of India are already experiencing depletion of groundwater and face the real prospect of a water crisis well before the consequences of climate change are felt.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">One of the practical technocratic approaches that has emerged and seems to have worked well in some states is the separation of power supply feeders for irrigation pump sets from those of rural settlements. While this involves some extra costs by way of additional and redundant infrastructure, it enables rationing of power supply for irrigation to meet actual needs of the crops being sowed. Such supply can also be given during off-peak hours when demand in the rest of the system is low.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">With this segregation, rural households can then be given power supply at par with urban areas in terms of both hours of supply and rates. For parity in hours of power supply, rural households would gladly pay normal urban rates. The private power company for Greater Noida tried this many years ago quite successfully. Parity in hours of supply would, at one stroke, enable Bharat to benefit from economic integration with India and the global economy.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The power ministry needs to use its leverage with the states and, even central funds, to persuade the states to adopt this approach. With increasing prosperity of a growing percentage of rural households, penetration of TV and other electrical appliances, revenues would rise and the subsidy burden for supply to rural households would decline. It would also be easier to have effective energy audit.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">This would make it more difficult to pass off theft of electricity in urban areas as supply to agriculture, a widespread practice in many states. If supply to agriculture is efficiently rationed and restricted to off-peak hours and the electricity regulators implement the tariff policy that mandates lower rates for off-peak hours, the subsidy burden would come down substantially.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Attempts could then be made to persuade farmers in some villages to try out electricity consumption through smart cards. This would incentivise more efficient use of both energy and water. More energy-efficient pumps would be used and fields would not be unnecessarily flooded.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">Like power supply to agriculture, kerosene oil subsidies have been a politically-sensitive issue. The large-scale diversion of subsidised kerosene oil for adulteration of petrol is well-known. The brave attempt by a public functionary to check this recently cost him his life and attracted a great deal of public attention. The rationale for kerosene oil subsidy in rural India has been the lighting needs of people: for cooking, they have access to firewood and cow dung cakes. Once evening supply of electricity to the habitation(s) in a village is assured, the justification for subsidised supply of kerosene to that village ceases to exist.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">A village community through its Panchayat may gladly choose to agree to the discontinuation of the supply of subsidised kerosene if evening power supply is ensured. This would spare the political leadership at the state as well as the central level of the burden of deciding to do away with the kerosene oil subsidy; they would only be agreeing to what some villages may choose. Initial success could snowball.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The difficult part would be to supply electricity in the evening. At a macro level, ensuring evening power supply requires the elimination of peaking shortages and that has been an elusive goal. The problem would be less intractable as the number of villages opting initially for foregoing subsidised kerosene oil supply would not be many. The Centre can initially try out the programme in states that are, relatively speaking, comfortable in terms of power supply and have separated agricultural feeders from those supplying rural households.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The Centre can use a part of its unallocated quota of power from central generating stations as an incentive. Funds for local electricity generation from biomass and solar energy could be earmarked for these villages to augment grid supply and ensure evening power supply. Assured evening power supply would be the key to success. BPL households are, in any case, being given free power connections under the Rajiv Gandhi Grameen Vidyutikaran Yojana. For remote, scattered settlements, solar lanterns may be an appropriate option.</div><div style="text-align: justify"><br /></div><div style="text-align: justify">The savings from the kerosene oil subsidy may be enough to recover the cost of investments in local electricity generation and storage to ensure evening power supply. The elimination of kerosene oil subsidies with a far better quality of life for rural households across India would become a real possibility.&nbsp;</div><div style="text-align: justify"><br /></div><div style="text-align: justify"><em>(The author is member secretary of the National Manufacturing Competitiveness Council)</em></div><div style="text-align: justify"><br /></div>                                                           
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    <br><a href="http://economictimes.indiatimes.com/news/economy/policy/how-to-slash-power-subsidies/articleshow/11906582.cms" class="re" target="_blank">The Economic Times, 16 February, 2012, http://economictimes.indiatimes.com/news/economy/policy/how-to-slash-power-subsidies/articleshow/11906582.cms</a><div class="clear"></div>
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Home हिन्दी

How to slash power subsidies by Ajay Shankar

Published on Feb 16, 2012   Modified on Feb 16, 2012

The irrationality and waste in energy subsidies in India has been a perennial theme in analysis of the Indian economy and in reform prescriptions. Progress has, however, turned out to be elusive in the face of ground realities and feasible politics.  The power ministry, after struggling for over a decade through repeated exhortations, had the satisfaction of getting a resolution in a Chief Ministers Conference in 2001 that free supply of electricity to farmers should be done away with. Nevertheless, 10 years later, the situation regarding free or, practically free, supply of electricity to farmers is practically the same. No chief minister seems inclined to touch the issue.  The power ministry has since given up and is now content with trying for compliance of the provision of the Electricity Act that requires the state governments to pay from the state budget for the subsidy involved in supply of power to farmers. Apart from the enormous strain on state budgets, this leads to waste of electricity through the widespread use of energy-inefficient pumps.  What is worse, it leads to excessive watering and lowering of the groundwater table. Large parts of India are already experiencing depletion of groundwater and face the real prospect of a water crisis well before the consequences of climate change are felt.  One of the practical technocratic approaches that has emerged and seems to have worked well in some states is the separation of power supply feeders for irrigation pump sets from those of rural settlements. While this involves some extra costs by way of additional and redundant infrastructure, it enables rationing of power supply for irrigation to meet actual needs of the crops being sowed. Such supply can also be given during off-peak hours when demand in the rest of the system is low.  With this segregation, rural households can then be given power supply at par with urban areas in terms of both hours of supply and rates. For parity in hours of power supply, rural households would gladly pay normal urban rates. The private power company for Greater Noida tried this many years ago quite successfully. Parity in hours of supply would, at one stroke, enable Bharat to benefit from economic integration with India and the global economy.  The power ministry needs to use its leverage with the states and, even central funds, to persuade the states to adopt this approach. With increasing prosperity of a growing percentage of rural households, penetration of TV and other electrical appliances, revenues would rise and the subsidy burden for supply to rural households would decline. It would also be easier to have effective energy audit.  This would make it more difficult to pass off theft of electricity in urban areas as supply to agriculture, a widespread practice in many states. If supply to agriculture is efficiently rationed and restricted to off-peak hours and the electricity regulators implement the tariff policy that mandates lower rates for off-peak hours, the subsidy burden would come down substantially.  Attempts could then be made to persuade farmers in some villages to try out electricity consumption through smart cards. This would incentivise more efficient use of both energy and water. More energy-efficient pumps would be used and fields would not be unnecessarily flooded.  Like power supply to agriculture, kerosene oil subsidies have been a politically-sensitive issue. The large-scale diversion of subsidised kerosene oil for adulteration of petrol is well-known. The brave attempt by a public functionary to check this recently cost him his life and attracted a great deal of public attention. The rationale for kerosene oil subsidy in rural India has been the lighting needs of people: for cooking, they have access to firewood and cow dung cakes. Once evening supply of electricity to the habitation(s) in a village is assured, the justification for subsidised supply of kerosene to that village ceases to exist.  A village community through its Panchayat may gladly choose to agree to the discontinuation of the supply of subsidised kerosene if evening power supply is ensured. This would spare the political leadership at the state as well as the central level of the burden of deciding to do away with the kerosene oil subsidy; they would only be agreeing to what some villages may choose. Initial success could snowball.  The difficult part would be to supply electricity in the evening. At a macro level, ensuring evening power supply requires the elimination of peaking shortages and that has been an elusive goal. The problem would be less intractable as the number of villages opting initially for foregoing subsidised kerosene oil supply would not be many. The Centre can initially try out the programme in states that are, relatively speaking, comfortable in terms of power supply and have separated agricultural feeders from those supplying rural households.  The Centre can use a part of its unallocated quota of power from central generating stations as an incentive. Funds for local electricity generation from biomass and solar energy could be earmarked for these villages to augment grid supply and ensure evening power supply. Assured evening power supply would be the key to success. BPL households are, in any case, being given free power connections under the Rajiv Gandhi Grameen Vidyutikaran Yojana. For remote, scattered settlements, solar lanterns may be an appropriate option. The savings from the kerosene oil subsidy may be enough to recover the cost of investments in local electricity generation and storage to ensure evening power supply. The elimination of kerosene oil subsidies with a far better quality of life for rural households across India would become a real possibility.  (The author is member secretary of the National Manufacturing Competitiveness Council)

The Economic Times, 16 February, 2012, http://economictimes.indiatimes.com/news/economy/policy/how-to-slash-power-subsidies/articleshow/11906582.cms

Tagged with: subsidies Energy Agriculture Farmers

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