Maharashtra govt. has now announced an ambitious plan to supply 1 lakh solar-powered agricultural pumps at highly subsidized rates to farmers. Solar pumps is modelled on the lines of central govt’s Atal Solar Krushi Pump scheme will would cost. 3,426 crore. This scheme is a biggest populist measure next after the farm loan waiver scheme which had been rolled out in June 2017 and the project aims to incentivise farmers and to reduce the state burden on subsidy.
The state govt. has made it clear that the additional burden will be raised through off-budget borrowings or by raising taxes on electricity for all consumers. Maharashtra Energy Development Agency (MEDA) is the nodal agency for the solar project.
Maharashtra govt. is working out on the estimates following directives issued by CM Devendra Fadnavis in this regard on 3 October 2018.
Solar Water Pumps to 1 Lakh Farmers in Maharashtra
The distribution of solar powered agricultural water pumps to 1 lakh farmers will imply a huge burden on the state government. Now due to the financial constraints, the state govt. has planned to split the implementation of state-sponsored project over 2 financial years to reduce the annual burden. Subsequently, the MEDA has proposed distribution of 50,000 farm pumps in 2018-19 and an equal number in 2019-20 to bring down the annual burden to Rs. 1713 crore.
The state govt. can absorb Rs. 434 crore which includes utilization of budgeted funds from the general budget (Rs 67 crore), the tribal sub-plan (Rs 150 crore), and the SC/ST sub-plan (Rs 217 crore). But still there remains a shortfall of Rs. 1279 crore for which govt. is considering 3 options:-
- Raising taxes on the sale of electricity – As per the MEDA calculations, govt. will need to raise taxes on the sale of electricity universally by Rs. 12 paise per unit consumed.
- Procurement of short-term low interest loan from NABARD – The state govt. is actively considering to procure a short term low interest loan from the National Bank for Agricultural and Rural Development (NABARD).
- Tie-Up with Centre’s Energy Efficiency Services Limited (EESL) – Maharashtra govt. is also exploring the option of having a tie-up with the Centre’s Energy Efficiency Limited (EESL) to implement the project and gap-funding. EESL can be paid for its services on annual installment basis.
Background – Atal Solar Krushi pump Yojana
The state govt. on 3 October 2018 has cleared the proposal to supply 7,000 pumps at nominal costs to the farmers awaiting power connection. Maharashtra govt. is struggling to recover farm electricity arrears which had previously announced a long term plan to shift its 45 lakh farm consumers to solar grid within 5 years.
The farmers owing less than 5 acre land will get a 3 HP solar-powered farm pump on just 5% of total cost and farmers with more than 5 acre of land will get 5 HP solar pumps on 5% of total cost.