Ahead Of State Polls, Maharashtra Announces 50% Cut In Farm Tariffs

Mumbai | Updated: May 31 2004, 05:30am hrs
The 50 per cent cut in power tariffs announced by the Maharashtra government in the budget presented last week for farmers paying electricity bills regularly shows that the Congress-led government is desperate in keeping this crucial vote bank happy for the forthcoming assembly elections scheduled in September-October.

Under the announcement, some farm tariffs have been brought down to 25 paise per unit from the present level of 50 paise. What makes the announcement interesting is that the state government has made it clear that the concession of 25 paise per unit would be applicable for one year.

Many see this as a populist move so that the saffron combine of Shiv Sena-BJP do not make bijli-sadak-pani as an election issue as was the case in Madhya Pradesh, Chhattisgarh and Rajasthan.

The genesis of this populist scheme traces back to NCP spokesman Vasant Chavans announcement last week who unilaterally demanded that power supply to the farming community is made free
What is interesting is that the Congress-Nationalist Congress Party, the major partners in the state government, have refrained from going the Andhra Pradesh and Tamil Nadu way making power supply to all farmers free.

The genesis of this populist scheme traces back to NCP spokesman Vasant Chavans announcement last week who unilaterally demanded that power supply to the farming community in the state is made free.

The NCP spokesmans announcement even caught the state energy minister Dilip Valse-Patil (who represents NCP) unaware and finally the energy minister had to clarify that the state government had no plans to supply free power to farmers.

If the state government had gone ahead with free power supply, the additional burden on the state would have been Rs 2,000 crore which it cannot bear ahead of assembly elections.

The state finance minister Jayant Patil, in his please all budget, was quite candid is stating that power at 25 paise would be supplied under the Krishi Sanjivani scheme to those farmers who are regular payers of electricity bills. Only such agricultural consumers would get 50 per cent concession for one year.

The state government had recently declared the Krishi Sanjivani Scheme in a bid to give respite to farmers having arrears of Rs 2,812 crore during 2002-03. MSEB has managed to recover Rs 479 crore through this scheme and an equivalent amount would be made available by the government to the MSEB during the current year for this purpose.

Mr Patil clarified that the state government was keen that more and more farmers should go for metered power supply which would help increase receivables for the Maharashtra State Electricity Board (MSEB). In the same breath, he made it clear that the state would have to shell out Rs 16 crore towards power supply at 25 paise.

According to MSEBs submission to the Maharashtra Electricity Regulatory Commission, the installation of meters may not be completed by December 2004. Out of 18,793 agricultural consumers above 10 horse power, 8,757 are metered and 10,011 are unmetered as on June 30, 2003.

As per the Electricity Act 2003, it has been made mandatory for the state government to compensate subsidies in a transparent manner. However, the state government was not in a position to clarify what pace they were installing meters to agricultural consumers and also whether they are keen for it.