Karnataka - Bangalore

Free power supply promise surprises power sector

BANGALORE: The promise of free power supply to irrigation pumpsets by the Bharatiya Janata Party (BJP) has not been received well by the power sector, especially electricity supply companies (Escoms) which were already reeling under a huge financial deficit that now stands at Rs. 2,000 crore.

Karnataka has nearly 16 lakh irrigation pumpsets, which account for about 27 per cent of the power used in the State.

At present, the tariff on irrigation pumpsets was an average 54 paise a unit as against the normal tariff of about Rs. 3.90.

But the average revenue recovery was less than 10 per cent, sources in escoms said.

The State had been providing huge subsidies of Rs. 1,800 crore a year to Escoms to bridge the difference in cost.

If farmers had to be provided free power supply, then the additional subsidy burden on the Government would be about Rs. 600 crore taking the subsidy requirement to Rs. 2,400 crore.

Even this would not meet the power supply expenditure.

At present, the State was resorting to cross subsidies, in addition to direct subsidies, to meet the power supply expenditure, which was said to be around Rs. 3,500 crore to Rs. 3,900 crore if normal tariff of Rs. 3.90 a unit was considered.

Cross subsidisation was being phased out as the national power tariff policy had said that by 2010 the difference between the tariff (to be paid by the user) and the actual cost of power supply should not be more than 20 per cent.

Sources in the power sector said the BJP was not looking at the larger issues concerning the sector.

Besides, free power supply might even hurt farmers’ interests in the long run as the Government might ignore quality of power supply in rural areas, thus accentuating the urban-rural divide in the power supply quality, sources said.

A senior Bescom engineer, who has worked in rural areas, said: “Farmers require quality power supply without interruptions rather than free power.”

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