Big reform! Punjab mulling ending power subsidies to big farmers

The Punjab government is considering ending power subsidies to big farmers (owning more than 10 acres of land). This is a step in the right direction, though much delayed—the Punjab State Farmers’ and Farm Workers’ Commission had first proposed charging farmers with more than four acres of land Rs 100 per BHP of their pumps per month in 2018. It had subsequently proposed, in a draft farm reforms policy, that subsidies to such farmers be cut to 33%—and to 66% for farmers who adopted micro-irrigation. The government had taken it up for consideration twice before now. Punjab’s power subsidies have brought the state to its knees—the CAG had highlighted that the state government had to pay off loans incurred by Punjab State Power Corporation (PSPCL), the state-owned genco-discom, which had severely depleted state finances. PSPCL, of course, had taken these loans because the state had deferred payment of subsidy dues. The state has been reluctant, so far, to end the power subsidies for farmers, likely because of the political fallout the move would have.