The allocation for energy subsidy given to agriculture and its allied sectors has been increased by ₹340 crore in the 2018-19 budget estimates, compared to the previous year, following the introduction of uninterrupted power supply to farm sector.
Although Finance Minister E. Rajender announced an allocation of ₹5,650 crore to energy department in the budget, the subsidy component has been pegged at ₹3,728.26 crore as against ₹3,387.81 allotted in 2017-18, as per the revised estimates. The allocation for energy department for 2017-18 was ₹5,292.66 crore.
Since the two power distribution companies pegged the revenue deficit at ₹9,800 crore for 2018-19 while submitting their tariff proposals to the Electricity Regulatory Commission in December last, it was expected that the allocation for subsidy component would go up considerably as the two utilities did not propose any hike in the existing retail supply tariff. “Now that the government has shown its commitment to the energy department, it has to be seen how the regulatory body will respond while clearing the tariff for 2018-19, which has to come into effect from April 1,” a senior official in the department said when asked for reaction on the budgetary allocation.
Agriculture sector
The distribution companies have already estimated the consumption by agriculture sector to be around one-third of the total, with the daily energy consumption already being considerably high owing to uninterrupted supply to farming.
In 2016-17, expenditure on energy sector was ₹15,266.6 crore mainly due to taking over of 75% of the debt of distribution companies after they joined UDAY scheme and for strengthening of transmission and distribution network. As expected, the thrust on irrigation sector continues in the budget estimates for 2018-19 too as the department has been allocated ₹25,000 crore.
Although the department has been getting the lion’s share in budget for last three years, expenditure is set to go beyond ₹20,000 crore during the current (2017-18) year.
With the work on major irrigation projects such as Kaleshwaram and Palamuru-Ranga Reddy in full swing, the department plans to spend most of the allocation during 2018-19 too. The expenditure on irrigation sector during 2015-16 and 2016-17 was ₹10,933.57 crore and ₹15,723.72 crore respectively.
