Even to provide farmers power upto 5 hp at a mere 30 paise, the board has to spend Rs 2.47 per unit. If the government insists that this should continue, it will need a special grant of Rs 640 crore annually. Of the Rs 4,008 crore grant provided to MSEB, Rs 3,275 crore goes towards agriculture, Rs 475 crore is spent on domestic consumers, Rs 13 crore is for poweerlooms and the balance for others, the board said.

The board's hard stand, according to observers, is a shot in the arm for the BJP which has opposed Sena supremo Bal Thackeray's directive to provide free power to farmers.

According to MSEB, it will lose Rs 346 crore towards supply of 5 hp, Rs 429 crore for 10 hp if it waives tariff. The board fears that it will not beable to recover long-pending dues worth Rs 647 crore from agricultural consumers using motor pumps as the farmers will press for waiver.

It may be recalled that MSEB has to recover Rs 2,800 crore, including Rs 647 crore till March 1998. The board has cautioned that the waiver will also lead to increase in power thefts and misuse. If the government decides to provide free power supply to users of 3 hp to 5 hp power, then those using more will benefit.

MSEB said that the waiver will affect quality of power and it will not be able to supply power free to motor pump users. It has added that a further power tariff hike on industrial and commercial users will be counter productive as most will prefer to leave Maharashtra.

MSEB said that an average 7.6 per cent power hike across the board has been made effective from September 1 this year and reiterated that it would not be possible to impose an additional burden on industrial and commercial users. Power sold to industrial and commercial users in 1994-95 was11,467 million units, 13,602 million units in 1995-96, 12,856 million units in 1996-97 and 12,635 million units in 1997-98.

The board has said that in Madhya Pradesh, power upto 5 hp has been supplied freely to farmers since February 1, 1994. In Tamil Nadu, the waiver was introduced in 1989 though the state pays Rs 500 crore annually to its electricity board. In Punjab, the state electricity board has increased power tariff on the supply of 10 hp to farmers from Rs 100 to Rs 300.