Free 9-hour power to farmers to cost govt. ₹1\,000 cr. per annum

Andhra Prades

Free 9-hour power to farmers to cost govt. ₹1,000 cr. per annum

There are more than 17.85 lakh pump sets in the State, and their average annual consumption is put at 12,574 MUs.

There are more than 17.85 lakh pump sets in the State, and their average annual consumption is put at 12,574 MUs.   | Photo Credit: CH_VIJAYA BHASKAR

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G.O. increasing the duration issued; this is in addition to the subsidy burden

The State government’s decision to extend free power to the agriculture sector from the present seven to nine hours is going to impose a burden of approximately ₹1,000 crore per annum on the exchequer.

This is in addition to the ₹6,000 crore subsidy being borne by the distribution companies (Discoms).

Sankranti promise

“In pursuance of the promise made by Chief Minister N. Chandrababu Naidu during Sankranti, the government has resolved to increase the duration of free power supply to the agricultural consumers by two hours, and provide subsidy thereof to the Discoms,” the government said in G.O. MS No. 17 issued on Friday night.

The government had earlier directed the Discoms to extend additional hours of free power supply to the farmers wherever necessary on the basis of requests from the public representatives and duly recommended by the district officials to save standing crop.

There are more than 17.85 lakh pump sets in the State, and their average annual consumption is put at around 12,574 million units.

Power bonds

As per G.O. MS No. 35 issued in October 2018, the government had given the nod for the A.P. Power Finance Corporation (APPFC) to make a private placement of power bonds worth ₹5,000 crore, and offered its guarantee for repayment of the principal and interest.

The arrears of subsidy for 2016-17 and 2017-18 stood at about ₹1,317 crore, and the subsidy for additional agricultural sales in 2015-16 and 2016-17 amounted to ₹960 crore.

Five per cent of the losses (₹117 crore) for FY 2016-17 was taken over under the Ujwal DISCOM Assurance Yojana (UDAY). The departmental arrears up to March 2018 were pegged at ₹3,820 crore.

The government offered to stand as a guarantor for raising a total of ₹11,417 crore as on October 30, 2018, but it was not utilised by the Discoms.

Principal Secretary (energy) Ajay Jain told The Hindu that the APPFC was permitted to raise bonds for ₹5,000 crore with a government guarantee to pay to the Discoms for the power subsidised by them. The bonds were already floated and open for purchase.

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