UP govt announces 100% rebate on power bills of farmers’ tubewells

Cash subsidy to UP Power Corporation Ltd (UPPCL), enabling it to provide free electricity to around 14 lakh electricity-run private tubewells owned by farmers in the state

LUCKNOW Fulfilling its promise made before the assembly polls a year ago, the Yogi Adityanath government on Tuesday paved way for free power to farmers by proposing a provision of ₹1,500 crore in the annual Budget for 2023-24. This will be made available as cash subsidy to the UP Power Corporation Ltd (UPPCL), enabling it to provide free electricity to around 14 lakh electricity-run private tubewells owned by farmers in the state.

In the last financial year, a 50% discount was given on electricity bills of private tubewell consumers (Pic for representation)

Prior to the UP assembly polls, the government had in January 2022 issued an order slashing farmers’ bills by 50%, and the BJP’s Sankalp Patra (manifesto), which followed, promised free power to farmers who run their tubewells with an electricity connection.

“In the last financial year, a 50% discount was given on electricity bills of private tubewell consumers. It has been raised to 100% in the financial year 2023–2024, for which a provision of ₹1,500 crore is made, according to the Lok Kalyan Sankalp Patra declaration,” finance minister, Suresh Khanna said in his budget speech.

However, the minister and senior energy department officials avoided saying “free power” to farmers. It is also not clear whether ₹1,500 crore provision would be sufficient for providing free power to 14 lakh farmers during 2023-24.

Last year, the UPPCL is believed to have sought from the state government ₹2,000 crore as subsidy to compensate for the revenue loss it would suffer on account of providing free electricity to farmers’ tubewells for one year.

Nearly 12 lakh of the 14 lakh private tubewells are unmetered in the state. All agricultural private tubewells together are expected to consume around 16,500 MU of power during 2023-24.

The average billing of tubewells, it is said, is just ₹1.22 per unit in case of unmetered tubewells and ₹2.54 per unit in case of the metered ones against the average production cost of ₹7.54 per unit.

Thus, the gap between the average revenue recovery and the average cost of supply will be ₹6.32 per unit in cases of unmetered tubewells and ₹5 per unit in case of metered ones.

According to information available with the UPPCL, around 14 lakh private tubewells used by farmers in UP have a total connected load of around 75 lakh kw that is more than 12% of the total power load in the state. They also consume around 15 lakh MU or 14% of the total energy in a year.

The number of agricultural tubewells is increasing every year.

Welcoming the provision by the state government, UP Rajya Vidyut Upbhokta Parishad chairman Avdhesh Kumar Verma said UP has now become the country’s sixth state to give free electricity to farmers.

“We welcome the move and demand the government to give some relief to domestic consumers too,” he said.