Direct Benefits Transfers

How would Direct Benefit Transfer (DBT) of power subsidy work?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Read the attached story

Context

  • Punjab has been providing free power to the agriculture sector.
  • The new Electricity Amendment Bill 2020 has proposed providing subsidy on power to farmers through DBT, which is contrary to the prevailing ‘free power’ system in Punjab.

Free or subsidised power is being provided to millions of consumers in almost every state. Punjab is no exception but its free power scheme is. Other states can learn from the example of Punjab, here.

Practice questions for mains:

Q. Discuss the efficacy of Direct Benefit Transfer in power subsidy for farmers.

Punjab on knees

  • Before it submits suggestions regarding the Electricity Amendment Bill 2020, recently drafted by the Union Power Ministry to amend the Electricity Act 2003, a big challenge lies ahead for the Punjab government.
  • Under the garb of DBT, it is a move to stop the free power supply to them.

What is the current system of power subsidy for farmers in Punjab?

  • At present, Punjab is supplying free power to 14.16 lakh electricity-run tubewells of the agriculture sector which are getting power through 5,900 Agricultural Pumpset Feeders (APFs).
  • These APFs are metered and the Punjab Power Corporation charges the state government for consumed units recorded in metered APFs.

The Free Power Scheme

  • Farmers are getting power supply for their Kharif and Rabi crops from these feeders as per the recommendations of the Punjab Agriculture University (PAU), Ludhiana.
  • It is supplied for around eight hours every day in Kharif season and four hours on alternate days during Rabi crop season.
  • The state government pays around Rs 6,000 crore power subsidy bill to Power Corporation every year under the scheme to the farming sector.

What would change under the DBT allowed under the new Electricity Bill 2020?

  • Under DBT, farmers will have to pay the bill for the power consumed for agriculture purposes.
  • After that, they will get the subsidy in their bank accounts through DBT.
  • A meter would be installed on every individual tubewell.

Issues with Punjab farmer

  • Approximately the annual power bill will come to around Rs 46,000 to Rs 48,000, and farmers are required to pay a bill of Rs 4,000 per month.
  • In Punjab, 67 per cent of farmers come under the small and marginal categories with 1-2 hectares land.
  • Paying bills in advance is not possible for them due to debt.
  • If farmers don’t pay their bills, the department will disconnect their connection, which could lead to farmers’ agitation.

Can it work like DBT on LPG gas cylinders?

  • The bill suggests the subsidy be paid directly to consumers in cash on the pattern of LPG subsidy.
  • This proposal should be tried in a pilot project and if results are encouraging, only then it should be included in the amendment bill.
  • It is not feasible to provide meters on every pump set up across the country and then give cash subsidy every month after the consumer has paid the bill.

Punjab government’s own DBT scheme titled ‘Paani Bachao Paisa Kamao’ is also working here. How it is different from DBT under the new Bill?

  • The Punjab government’s scheme is a voluntary one.
  • The farmers who have adopted it need to get install a power meter on their tubewell but are not required to pay any power bill.
  • The main purpose of PBPK is to save groundwater by using it judiciously because, under the traditional system, several farmers are misusing the water by over-irrigating the crops due to free power available to them.

What do farmers’ organisations think of this?

  • Farmers’ organisations say that if the Punjab government agrees to this bill, they will fight it tooth and nail.
  • From where will poor farmers pay such heavy bills when they get an income after six months following the sale of their crop, they ask.
  • Anywhere in the world, the agrarian sector cannot run without the support of the government as it is the base of every human being who is dependent on farmers’ produce from his/her morning tea to dinner.

Back2Basics

[pib] Draft Electricity Act (Amendment) Bill, 2020

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments