For Telangana’s rural economy, 24x7 free power could be transformational

V Rishi Kumar KV Kurmanath Hyderabad | Updated on January 08, 2018 Published on January 02, 2018

K Chandrasekhar Rao, Chief Minister of Telangana

The ₹6,000-crore, 24x7 power supply promised to the agriculture sector from January 1 in Telangana is a pioneering move with far-reaching consequences politically and financially, with potential to rejuvenate the rural economy.

From a deficit of about 2,000 MW when the State was formed in June 2014, to be in a position to supply 24x7 power to all industries, and now round-the-clock free power to farmers from the Rabi season, is a creditable achievement.

However, the impact of free power on the State’s finances, and the health of the distribution companies, or discoms, needs to be closely watched.

The State utilities have invested ₹12,316 crore to strengthen the transmission and distribution system for 24x7 power supply. D Prabhakar Rao, CMD of TSGenco and TS Transco, told BusinessLine: “The idea of providing 24x7 power is to ensure all-round development of the State and boost the rural economy, including various allied industries. Funding is not a problem, as the State had provided ₹4,500 crore last year and also ₹2,000 crore additionally towards payment to Singareni (Collieries Co Ltd).”

“Apart from the initial ₹4,777 crore, the additional burden will be ₹1,000-1,200 crore. The Chief Minister (K Chandrasekhar Rao) has promised in the Assembly to provide financial support,” he added.

The discoms will have to contend with additional agricultural demand of 9,765 million units in FY18.

Revenue gap

“In FY19, the agriculture sector is likely to consume 16,000-17,000 million units,” Prabhakar Rao further said. The State has 23 lakh pump sets, and the number is set to swell as the new connections are provided.

Two discoms have made projections that in FY19, the revenue demand will be ₹35,774 crore, against a revenue generation of ₹26,003 crore, leaving a gap of ₹9,771 crore.

To bridge the revenue gap, the government will have to significantly increase the budgetary support to keep the discoms financially healthy.

Farming NGO Telangana Rythu Sangham says there are multiple issues that bother the farming community, power availability being one.

However, 24x7 power may not solve all the issues. Sarampally Malla Reddy, Vice-President of the All-India Kisan Sabha, said there are issues that need to be addressed in this regard. “They (government) want to do away with auto-starters. They are also asking for mandatory use of ISI-standard pump sets which need heavy investments. The government should help farmers by giving subsidies on these,” he said.

Of the 54 lakh farmers in Telangana, about 82 per cent are small farmers.

“They won’t be willing to remove auto-starters until and unless they are satisfied with reliability (of supply). Small farmers can’t invest in buying new pump sets to meet the requirements,” said Reddy.

Published on January 02, 2018
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