Montek report to Punjab govt: Punjab’s free power policy highly regressive, benefits only big farmers
Ahluwalia has also asked it to gradually reduce procurement of paddy from the extremely water-stressed areas, a suggestion which is expected to receive a sharp reaction from farmer communityUpdated: Aug 14, 2020 01:58 IST
Former deputy chairman of planning commission Montek Singh Ahluwalia has termed Punjab’s policy of free power to agriculture sector as “highly regressive” as it benefits only big farmers.
In a report submitted to the Punjab government, Ahluwalia has also asked it to gradually reduce procurement of paddy from the extremely water-stressed areas, a suggestion which is expected to receive a sharp reaction from farmer community.
The free power largesse --- incurring an annual burden of Rs 6,500 crore on the cash-strapped government --- has remained a sensitive political issue in Punjab, with no regime really being able to do away with the populist measure ever since it was announced in 1996.
Punjab chief minister Capt Amarinder Singh had sought suggestions from the expert group, led by Ahluwalia, on ‘medium and long term post-COVID economic strategy for Punjab’.
The report lists out three damaging consequences of free power policy. “It has led to an unsustainable burden on the budget and limits the state government’s ability to incur other expenditures essential for development. The total power subsidy in 2021 amounts to almost 1.9% of GSDP,” says the report. There are at least 14.5 lakh agriculture tubewells that draw benefit of this scheme. The Amarinder government had proposed to generate bills for tubewell use and offered direct cash benefit to farmers. However, the plan was junked after stiff political opposition.
“Secondly, the policy has very damaging environmental consequences because it promotes water intensive paddy cultivation, leading to an excessive use of groundwater,” it added. “And lastly, only big farmers were really benefitting from the scheme,” the report said.
Darshan Pal of Kranti Kari Kisan Union termed the report as anti-farmer and anti-Punjab. “The present government is looking for excuses to end free power to agriculture sector but we will not let it happen,” said Akali Dal spokesperson Daljit Singh Cheema.
FOLLOW HARYANA MODEL
The expert group said Punjab needs to reduce the area under paddy by about 25 lakh acre (out of total 76 lakh acre under paddy) over the next 6-7 years.
Suggesting Punjab to adopt Haryana model, it said the latter is currently giving an incentive of Rs 7,000 per acre in overexploited blocks to diversify.
“Punjab should consider something along these lines. This would reduce the use of electricity, resulting in big saving on the subsidy front,” says the report.