Earlier this year, the Cabinet approved the Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM).
There is a budgetary allocation of ₹34,000 crore to KUSUM and a similar contribution is expected from the States.
What is KUSUM about?
KUSUM aims to provide energy sufficiency and sustainable irrigation access to farmers.
Objective - Providing financial and water security to farmers.
The components of the proposed scheme are
Component-A: 10,000 MW of Decentralized Ground Mounted Grid Connected Renewable Power Plants.
Component-B: Installation of 17.50 lakh standalone Solar Powered Agriculture Pumps.
Component-C: Solarisation of 10 Lakh Grid-connected Solar Powered Agriculture Pumps.
What is the current situation?
Despite growing farm power subsidies, nearly 30 million farmers use expensive diesel for their irrigation needs.
This is because they have no access to electricity. More than half of India’s net sown area remains unirrigated.
KUSUM could radically transform the irrigation economy if the government chooses an approach of equity by design and prudence over populism.
What does the approach of Equity by design mean?
To reduce the existing disparity among States with regard to solar pumps deployment and irrigation access should be the first aim.
This disparity highlights poor State budget allocation towards solar pumps and the lack of initiative by State nodal agencies.
To encourage equitable deployment, the Centre could incentivise States through target linked financial assistance and create avenues for peer learning.
KUSUM must address inequity within a State - This is addressed by a share of central financial assistance under KUSUM should be appropriated for farmers with small landholdings and belonging to socially disadvantaged groups.
By providing greater financial assistance to smaller farmers, instead of a onesizefitsall approach.
KUSUM proposes a 60% subsidy for the pumps, borne equally by the Centre and the States, and the other 40% will be the farmer’s contribution.
This will exacerbate the inter farmer disparity given the inequity in access to credit and repayment capacity between small and large farmers.
A more economical and equitable alternative - A higher capital subsidy support to small and marginal farmers and long-term loans with interest subsidies for large and medium farmers.
What does the approach of prudence over populism mean?
Solarising existing grid connected pumps needs a complete rethink. Existing grid connected farmers would receive the same financial support as that received by an off-grid farmer.
In addition, the farmer would earn regular income from the DISCOM on feeding surplus electricity, furthering the inequitable distribution of taxpayers’ resources.
Instead of this, the scheme should only provide Central government subsidy of up to 30% for solarisation, and use the proposed State support to incentivise DISCOMs to procure energy from the farmers.
Instead of feeding surplus energy to the grid, solar pump capacity could be used to power post harvesting processes, which complement the seasonal irrigation load.
The entire feeder could be solarised through a reverse bidding approach, and provide water conservation linked incentives to farmers as direct benefit transfer.
