Chandigarh, September 6
More than three years after withdrawing the facility, Punjab reverted to the old policy and announced free power for all farmers from September 1.

Giving details of the scheme here today the Punjab Chief Minister, Capt Amarinder Singh, said “the state has enough resources to provide financial support to this scheme.”

The new largesse, aimed at the Assembly elections less than 16 months away, will jack up the power subsidy bill of the state from Rs 1100 crore to Rs 1,539 crore.

The Chief Minister said the state had decided to do away with the “energy bonus” scheme and introduce free power, as there were administrative problems in providing this bonus, which had conditions related to the size of the land holding and the capacity of the tubewell used for irrigation.

He said: “We have decided to give free power to every farmer so that there is no harassment of farmers from any quarter, including the Revenue Department, which was earlier to verify land holdings for the grant of energy bonus.”

The Chief Minister said that this decision had been taken on the advice of his Cabinet which felt that nobody should be left out. Two weeks ago, Capt Amarinder Singh had announced “energy bonus” for small farmers. At that time one of the views was that the political benefits would not be much as only a small section of the farmers would gain. This forced a change in the decision allowing free power to all and not “energy bonus” to a select few.

The Amarinder Singh government had done away with free power when it was voted to power in 2002. Then free power was blamed for the financial mess created by the previous Badal government. It was Mr Parkash Singh Badal who first provided free power in 1997.

Asserting that his scheme of free power was different from that of the Badal government, Capt Amarinder Singh said: “We will not starve the Punjab State Electricity Board (PSEB) of funds but make a budgetary allocation to meet this expense”. When asked where the money would come from, the Chief Minister said: “Funds are not a problem for supplying free power as there has been an over 100 per cent increase in revenue receipts which amounted to Rs 17,238 crore till last month as against Rs 8,929 crore three years ago. VAT has made a big difference.”

In the past nine months the state had not resorted to an overdraft. Punjab had deposited Rs 900 crore with the Reserve Bank of India and was earning interest on it. In such a scenario the state would have no problem of funds, said the Chief Minister while justifying his move. “We need to give some economic strength to farmers.”

All farmers would have to clear their dues till August 31 to be eligible for free power. The PSEB would keep sending bills to farmers so that they knew how much power they had consumed, but the amount payable would be nil.

Free power would put an additional burden of Rs 439 crore on the state exchequer as compared to Rs 250 crore which would have been due on account of the “energy bonus” scheme announced for the agricultural sector last month. The Rs 439 crore burden would be in addition to the Rs 1,100 Crore given by the state so far to the PSEB as subsidy for the farm sector which was supplied with power at 60 paise per unit.

Answering a question regarding the Prime Minister, Dr Manmohan Singh, having opposed free power to the agricultural sector, the Chief Minister said that he had recently told him that the Congress government in Punjab was committed to giving the facility as a promise had been made in this regard before the 2002 Assembly elections.