KUSUM and Irrigation Economy

The Cabinet has approved the extension of the Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme. The scheme has three components:

• 10,000 megawatt (MW) of decentralised ground mounted grid-connected renewable power plants (Component-A).
• Installation of 17.50 lakh standalone solar-powered agriculture pumps (Component-B).
• Solarisation of 10 lakh grid-connected solar-powered agriculture pumps (Component-C).

Component-A and Component-C will be implemented on pilot mode for 1,000 MW capacity and one lakh grid-connected agriculture pumps, respectively and would be scaled up after a pilot run and Component-B will be implemented in a full-fledged manner.

Strengthening Irrigation Economy

Reducing Inequalities between States

Chhattisgarh and Rajasthan together account for about half of the two lakh solar pumps currently deployed in the country. On the other hand states such as Bihar, Uttar Pradesh and West Bengal, where penetration of diesel pumps is among the highest, have not managed to deploy any significant number of solar pumps.

Hence to ensure equitable distribution the Centre should incentivise States through target-linked financial assistance, and create avenues for peer learning.

Addressing Intra-state Inequalities

In Bihar, 90% of farmers are small and marginal but have received only 50% of government subsidies on solar pumps. On the other hand in Chhattisgarh, about 95% of beneficiaries are from socially disadvantaged groups due to the mandate of the State. Hence as in Chattisgarh, a share of central financial assistance under KUSUM should be appropriated for farmers with small landholdings and belonging to socially disadvantaged groups.

Prioritising Small Farmers

Under KUSUM, 60% subsidy for the pumps, borne equally by the Centre and the States, and the remaining 40% will be the farmer’s contribution — 10% as down payment and 30% through loans.

This one size fits all approach will exacerbate the inter-farmer disparity given the inequity in access to credit and repayment capacity between small and large farmers. Hence higher capital subsidy support to small and marginal farmers and long-term loans with interest subsidies for large and medium farmers must be provided for an economical and equitable alternative.

Restructuring the Scheme

The government must rethink on solarising existing grid-connected pumps because these existing grid-connected farmers have enjoyed power subsidies for decades and would be provided with the same financial support as that received by an off-grid farmer. Further, they could earn a regular income from the DISCOM on feeding surplus electricity, furthering the inequitable distribution of taxpayers’ resources.

KUSUM which aims at solarising the irrigation must become more broad-based and inclusive. Through better design and implementation, KUSUM has the potential to catapult the Indian irrigation economy from an era mired in perpetual subsidy, unreliable supply, and inequitable distribution of resources to a regime of affordable, reliable, and equitable access to energy and water.