Power subsidy reforms

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THE Punjab State Farmers’ & Farm Workers’ Commission has hit the nail on the head — no more free electricity to big farmers. The two-decade-old power largesse in the state, which was started by the Congress regime and faithfully continued by successive governments, including that of the Shiromani Akali Dal, is a monster no one knows how to tackle. The people of cash-strapped Punjab are forced to pay for power subsidies worth over Rs 6,000 crore every year. Every penny of public money is precious. Splurging it on power subsidies to the undeserving is socially disdainful and economically expensive, as it comes at the cost of other crucial sectors such as education, health and infrastructure. This menace is being perpetuated for political compulsions.Free power has also been the foremost cause for irresponsible use of the precious ground water resource, which is down to alarming levels in a large part of the state, and more tubewells continue to be installed. This has also been a disincentive for diversification to crops other than paddy. While the deleterious effects of the present two-cereal pattern is well acknowledged, what has not become part of the larger debate is the chain of potential benefits that may be triggered once the state starts experimenting with alternative crop and marketing models.While subsidies may be a necessity in an asymmetrical society such as ours, where the gulf between the rich and poor is very wide, a distinction needs to be made between the various classes of beneficiaries. The suggestion to exclude income tax-paying farmers from power subsidy is just one step. There are rich farmers who benefit on both ends — not paying tax like the other rich, and also gaining benefits meant for the poor. To bring landholding size into the subsidy equation is thus a bold but justified measure. Chief Minister Capt Amarinder Singh has expressed his disinclination to accept this suggestion, but he would know better than anyone else the state of his government’s coffers. There are still more than three years to go; he will leave behind a celebrated legacy if he can work out a viable alternative model.

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