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Uttar Pradesh budget to earmark subsidy for free power supply to farmers
UPPCL has demanded that the state government provide ₹2000 crore as subsidy to compense for the revenue loss on account of supplying free electricity to farmers’ tube wells during the current financial year
The Yogi Adityanath government will make provision of additional cash subsidy in the forthcoming annual budget to enable the U.P Power Corporation Ltd (UPPCL) to provide free power to farmers in Uttar Pradesh in keeping with the ruling BJP’s pre-poll promise, energy department officials said.
The government is expected to present the annual budget for the year 2022-23 in the state’s bicameral legislature in May-June.
The UPPCL, according to them, has demanded the state government provide it ₹2,000 crore as subsidy to compensate for the revenue loss it will suffer on account of providing free electricity to farmers’ tube wells during the current financial year itself.
“The corporation has also demanded a budgetary provision of an additional ₹250 crore to make up for the revenue loss it has already suffered by halving farmers’ electricity bills on government’s directives before the polls,” an official said.”
“The agriculture department will now earmark the funds in its budget to provide subsidy to the UPPCL for providing free power to farmers’ tube wells,” he added.
UPPCL managing director Pankaj Kumar, who recently wrote a letter to the government demanding additional agriculture subsidy to provide free power to farmers, also pointed out that there were around 13 lakh (1.3 million) private tube wells being used by farmers and nearly 12 lakh (1.2 million) of them were still unmetered.
Kumar, in his letter, further said that all the agricultural private tube wells together were expected to consume 16361 MU (million units) of power during 2022-23. The averaging billing of tube wells, he pointed out, was just ₹1.22 per unit in case of unmetered tube wells 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 tube wells and ₹5 per unit in case of metered ones,” he said in the letter while proposing the budgetary provision of additional subsidy during 2022-23.
The state government already provides around ₹2,000 crore subsidy to UPPCL in lieu of supplying power to rural domestic consumers at a rate below the production cost that comes to more than ₹7 per unit.
Prior to assembly polls in the state, the government in January slashed farmers’ bills by 50% and the BJP’s Sankalp Patra (manifesto) that followed promised free power to farmers who run their tube wells with an electricity connection.
According to information available with UPPCL, around 13 lakh (1.3 million) private tube wells used by farmers in Uttar Pradesh have a total connected load of 70 lakh kw that is around 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 tube wells is increasing every year.
