Maharashtra plans to cut power tariff for farmers, aims to install solar pumps in fields

MUMBAI: The Maharashtra government is seeking to reduce the power tariff for industrial users by lowering the burden they need to take on to help the state supply cheap electricity to farmers. The plan is to give solar water pumps to farmers and reduce their dependence on conventional energy. 

On Tuesday , chief minister Devendra Fadnavis' cabinet is expected to approve a proposal to install 7,500 solar water pumps for farmers in Vidarbha and Gadchiroli as a first step, said a state government official with knowledge of the plan. The government aims to give as many as 40 lakh pumps in five years, he said.

Maharashtra, which has one of the highest power tariffs for industrial consumers, hopes this will eventually help reduce the rates by close to 30 per cent.

Maharashtra charges industrial consumers an average Rs 8.50 a unit, while for commercial enterprises it is Rs 11. Over the past, this high rate of power being charged in the state has had many industries relocating to other states, mainly Gujarat and Chhattisgarh, where power tariffs are lower.

The cost of power in Maharashtra is high because industries have to bear a part of the subsidy that the state government offers to farmers. 

While the per-unit cost of supplying power is Rs 5, a farmer pays just Rs 1. The state government pays the Maharashtra State Electricity Distribution Company Rs 1.8 as direct subsidy. Industries are levied an extra Rs 2.3 a unit to reduce the burden on the utility.

The government move to remove the cross-subsidy burden comes after representations from numerous industrial ists who have complained about the high power rates in the state. 

"Our plan is to ensure that the farmers can use the solar water pumps for pumping water in the fields and that could free the farmers from the state grid. In the first year, we have set up a target of giving five lakh water pumps. In five years, we will give 40 lakh solar water pumps. This will reduce the cross subsidy bur den," said the official.

The tariff reduction for industries would not materialize immediately and would depend on the success of the program. 

"You will see a reduction in the power tariff only after a year, however it would be down by around 30 per cent. So if an industrial unit is paying Rs 8.5 per unit now, it would have to pay only Rs 6 if the plan succeeds. We will thus not just be retaining our industries but will have industries from other states flocking to us," said the official.

Another government official from the state's power department said the idea has been borrowed from Rajasthan where 10,000 such solar water pumps have been given by the government. Those water pumps are working properly, he said. 

The state government is also pinning its hopes on the auction of coal mines to help further reduce the cost of producing power. The state feels that it could cut the cost substantially if it gets mines close to coal-fired power plants.

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