The Hindu Business Line : Draft power policy to bill corporate farmers in AP

IN an effort to streamline the free power policy and to ensure there is energy audit, the State Government on Tuesday announced a draft policy that seeks to continue to offer free power to some sections of the farm sector and levy charges on the corporate farmers and IT assessees with farm lands.

Addressing a press conference here today after the State Cabinet meeting, the Chief Minister, Dr Y.S. Rajashekhara Reddy, said there was no dilution of the election promise to provide free power to the farm sector. "What we are attempting today could actually serve as a model approach for other States to emulate."

"This energy audit is aimed at actually assessing the power consumption by the farm sector on one side and also streamline and regularise farm connections. Once this is done, we would be able to address this free power issue better. In the case of illegal farm connections, which have been disconnected, they can regularise through the tatkal scheme," he said.

The Government spends substantial amounts on irrigation projects and supplies water at nominal rates to the farmers in the canal irrigation system whereas the farmers in upland areas have to incur capital expenditure for drilling wells, purchasing motors and securing electrical connections. Paying recurring tariff is, therefore, an unaffordable burden for them, Dr Reddy said.

According to the new policy framework, farmers in the dryland areas having more than three connections in the name of their family will be charged a tariff of Rs 0.50 per unit or equivalent flat rate or a tariff of Rs 0.20 per unit or equivalent flat rate tariff if they adopt power saving measures.

Even small and marginal farmers owning wetland up to 2.5 acres will continue to get free power but they need to adopt power saving measures such as installing capacitors, take to frictionless foot-valves, and new pumpsets by March 2006, the Chief Minister said.

On the other hand, corporate farmers, including partnership firms and societies and income-tax assesses owning agriculture lands will be charged a tariff of Rs 2 per unit as they have other sources of income and do not depend on agriculture activity for sustenance.

However, a 50 per cent incentive shall be permitted if such farmers adopt power saving measures. Metering will be compulsory and no supply will be based on flat rate tariff.

While this initiative is aimed at making the power sector more efficient, the savings through these measures are negligible. But what is saved through efficiency would enable the Government to provide up to 50,000 new power connections annually under free power scheme, he explained.

VAT Ordinance: The Cabinet today approved an ordinance that would help transition to the new value added tax (VAT) regime from April 1, 2005. This replaces the VAT Bill of 2003, which was not enacted following the delay in implementation of the VAT regime after the Group of Ministers decided on its postponement earlier.

Dr Reddy said that the ordinance will also bring in certain changes in which the turnover tax is levied and the VAT regime implemented.

For instance, as opposed to Rs 3 lakh limit for traders, it has been hiked to Rs 5 lakh and the Government has also decided to scale up the VAT implementation limit from Rs 25 lakh earlier to Rs 40 lakh now.

Cooperative Act: The Cabinet today approved an ordinance that amends certain provisions in the Andhra Pradesh Cooperative Societies Act, 1964, which was comprehensively amended in the year 2001.

Following representations, the proposed ordinance brings new classification of members of primary agriculture cooperative societies.

The amendment seeks to bring new audit practices, cover deposit of funds into district cooperative banks and issues relating to election to members.

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