In a freewheeling interview given to a leading national daily, Minister of state for power and renewable energy RK Singh, informed about a scheme for rural areas viz. Kisan Urja Suraksha evam Utthaan Mahabhiyan [KUSUM] already approved by the cabinet and will be launched within a time frame of 2-3 weeks – to be implemented over a period of three years.
Intended to promote the use of solar energy in rural areas, the scheme allows a farmer to use his barren land – currently lying fallow – to set up a solar plant on it for 1 MW or so [in case, the land is cultivable then he can set it up on stilts and grow crop below]. Whereas, during the crop season [spanning over 3-4 months], the farmer will use the power for cultivation, for the remaining period, the units generated at the solar plant will be purchased by the centre.
The union government will give capital subsidy to cover 30% of the cost while the state will bear another 30%. Of the balance 40%, the farmer will get 30% as loan at concessional interest rate and 10% to be paid from his pocket. The total cost of implementing the scheme is estimated to be about Rs 146,000 crore of which the contribution by the Centre will be Rs 34,000 crore.
The scheme has the potential to bring about a metaphorical transformation in not just the way farming is done and augmenting farmers’ income but also help in giving a new lease of life even to power distribution companies [DISCOMs] which at present are literally on a ventilator gasping for life. Let us look at the way things will actually pan out on ground zero.
From farmers perspective, the solar plant will not only supply all his electricity requirement [for running pump sets and other needs including domestic consumption] but also generate surplus particularly during the non-cropping which can be sold [the centre has promised guaranteed purchase] to generate cash. After paying back the loan in a couple of years, this will add to his income.
At present, the farmers spend substantial amount on buying diesel to run pump sets more so, in areas which are either not connected to the grid or supply is short of the needs [these voids remain despite strengthening of the transmission network and distribution system under the Deen Dayal Gram Jyoti Yojana (DDGJY)]. With a captive source of power in place, they can drastically reduce spend on diesel [this can bring down irrigation bill by as much as 90%].
Apart from helping farmers increase their income, this will also be environmentally benign as consumption of diesel – a major pollutant – goes down. It will also help in achieving the target of 40% share of renewable energy in India’s total power capacity as committed under the Paris Agreement on Climate Change. Saving on oil import bill [and reducing C/A deficit] will be an added bonus.
At present, there is over-exploitation of ground water, courtesy unrestricted availability of electricity at heavily subsidized rate [even free in some states]. However, in a scenario of having their own power source juxtaposed with an incentive that they can increase their income by selling surplus power, the farmers will be motivated to shun the current unhealthy practice thereby helping in conservation and preventing depletion of ground water.
From the perspective of DISCOM, this could be a boon. Today, a major reason for their incurring loss year-after-year is supply of power to farmers and households at heavily subsidized rate or even free [under direction from their owner viz. the states]. Even after charging exorbitant rates from industries, they are unable to plug the shortfall in realization from sale to these preferred consumers. Their woes are exacerbated by large-scale power theft.
In this backdrop, if the farmers can meet all of their power requirement from captive source [read: solar plant], this will obviate the need for supply from the grid. When, DISCOMs don’t have to supply electricity to the farmers, the compulsion to make it available at subsidized rate won’t exist. So, the losses associated with such supplies [albeit subsidized/below cost] will automatically disappear.
Extrapolate the idea to households. If, solar plants can be installed on roof tops of housing societies and clusters of houses in rural and urban agglomerations, it will also help in reducing losses of DISCOMs which arise due to supply of electricity to households at subsidized/below cost rate under the extant dispensation.
Putting in place a renewable energy based, decentralized and self-propelled system of meeting the power requirements of farmers and households could also help reining in power theft – a third major factor that contributes to losses of DISCOMs.
In short, the scheme could be a gateway to the wonderland – a land on which farmers will be better-off, DISCOMs financially healthy, households will save a lot on their electricity bills and environment will bear less pain. But, there are many imponderables.
Given the state of the union finances, garnering required resources Rs 34,000 crore will be a big challenge. For the same reason, getting the states to contribute another 30% won’t be easy. Even more worrying is the balance 40% for which the onus comes on the farmer. Apart from 10% which he/she has to give upfront, the responsibility of amortizing the loan falls entirely on him/her.
Today, the government perceives farmers economic situation to be so precarious that it is prompted to give to everyone Rs 6000/- annually [under PM-KISAN] so that they can buy agricultural inputs such as fertilizers, seeds, pesticides etc. How then are they expected to pay a huge sum Rs 4.5 million @10% [cost of 1 MW solar plant: Rs 45 million] being their contribution upfront?
Finally, for decades, farmers have been used to free/heavily subsidized power [propelled by politicians who thrive on populist measures such as this]. Getting them transit to an effort-based, self-driven system – free from sops – will be a herculean task.