The Hindu Business Line : Free power may lead to illegal connections in Maharashtra

BY deciding recently to provide free power for all farmers effective July 1, regardless of the capacity of their pump sets, the Maharashtra Government may trigger several developments not easy to cope with:

A spate of new applications for new pumps and if not approved and connected, illegal drawal of power to run them.

Highly placed sources said that officials who were asked to prepare a Cabinet paper pointed out the pitfalls to the Cabinet but "populist politics prevailed over good economics."

When the Shiv Sena talked of free power, the Congress(I)-NCP alliance "over reacted" because farmers in Maharashtra had demanded regular power, not free electricity. As it is, the Maharashtra State Electricity Board (MSEB), which has energised as many as 2.4 lakh agricultural pump sets till 2002-03, including 38,052 in 2001-02 and 49,014 in the next, receives about a lakh of applications a year and is unable to satisfy the demand because of the huge gap of 2,000-2,200 MW between demand and availability.

That 2.4 lakh connections, the MSEB claims, "is the largest for any State. "Such huge use of pump sets, when driven by free power, officials fear, would lead to massive withdrawal of ground water, which is already receding across the State. Examples of such overuse in the surface water irrigation systems within the State because water was not measured and the experience of Punjab where free power was allowed were cited but to no avail. Metering is not universal and the MSEB has been behind its requirement of metering all connections despite a requirement of the regulator.

In the absence of metering and freedom to use limitless electricity can really create complications, a fact which has been buttressed in every argument by the officialdom but the political establishment merely wanted a Cabinet paper overnight. In fact, the MSEB's resources are stretched when it comes to findings means to fund it. However, Maharashtra's farmers do not have a culture of paying up their bills, mainly because of political patronage and due to seasons of distress. When the Maharashtra Electricity Regulatory Commission (MERC) allowed an amnesty scheme whereby the farmer is allowed to pay up half of his overdues, it pointed out that it was "concerned about the future impact" on the "payment culture."

This, in general, would have its negative implications to the "critical bearing on the viability of the existing and future utilities and licensees" and hoped that the Government of Maharashtra would "share these concerns while exercising its prerogative" of providing free leg-ups to sections of consumers. This view of MERC was voiced as early as January 2004.

Not all excepted payments flowed due to the amnesty but only in part. The dues from the farmers, accumulated over years, was Rs 2,674 crore at the end of October 2003 and it was planned that the Government would compensate — a rigid criterion of the MERC — residual half to the MSEB.

However, despite an extension, this has not lived up to it but the utility's view is that whatever the flow, "it is cash on the table;" but hardly Rs 500 crore has been received.

More Stories on : Power | Agricultural Policy | Maharashtra

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
TN farmers told to sow medium varieties of samba seeds

Drip irrigation contract

Gamut of fishing

Free power may lead to illegal connections in Maharashtra

Sunny days take sheen off rubber

Indian tea cos woo Pak buyers

Borewells won't drill a hole in AP ryots' pockets anymore

Govt to set up single window body for GM crops

No rib-tickler this

Cotton institute to develop Bt strains

Free power to AP farmers

US, India soya crop may be lower than forecast

Q1 cashew exports up