The Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM KUSUM) scheme has been expanded to cover 20 lakh farmers, up from 17.5 lakh farmers it was initially intended to cover.

The scheme was initially announced in Budget 2019 to provide a parallel source of income to farmers.

It took the Centre over a year to get the Cabinet’s approval for the same primarily because of the massive budgetary support required. It was initially proposed that this ₹1.44-lakh crore scheme would solarise every agricultural pump and replace all the grid-connected pumps with solar power over 10 years.

The Central Financial Assistance (CFA) then envisaged for the scheme was ₹48,000 crore. A similar amount was to be parked by the States and financing institutions.

“The new KUSUM is an expansion of the earlier scheme...It will not require any fresh approvals from the Cabinet until the existing targets are not met,” RK Singh, Minister of State (Independent Charge) for Power and New and Renewable Energy, said.

Financial aid

Under the scheme approved by the Cabinet, the Centre is to provide ₹10,000 crore for four years. The Indian Renewable Energy Development Agency (IREDA) will borrow ₹6,000 crore for the first phase (lasting for a year) to fund the Centre’s contribution and IREDA ₹15,000 crore for the second phase that will last for a year.

The Budget has also expanded the ambit of the KUSUM scheme to now replace 15 lakh grid-connected pumps with solar pumps. “We shall also help another 15 lakh farmers solarise their grid-connected pumpsets. In addition, a scheme to enable farmers to set up solar power generation capacity on their barren land and sell it to the grid will be operationalised,” Finance Minister, Nirmala Sitharaman said in the Budget speech.

A step forward

“This is a major step forward in which farmers with barren land will be helped to set up solar power projects on their land, sell the power to the grid and make a living,” she added. On a per pump basis, the Centre will subsidise 30 per cent of the cost, the States would do the same, and 30 per cent of the amount will be offered as loan.