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Andhra Pradesh to introduce cash transfer scheme for agricultural electricity


Andhra Pradesh has introduced the Farm Electricity Cash Transfer Scheme which will virtually eliminate free power supply from the agricultural sector.

The state government of Andhra Pradesh is set to introduce the Farm Electricity Cash Transfer Scheme from FY 2021-22 which will virtually eliminate free Power provide to the agricultural sectorhowever, the government has maintained that it will foot the entire bill amounting to around Rs 8,400 crore per annum.

The government will install smart meters for all agricultural electrical connections as part of the reforms suggested by the Center which it has agreed to implement for a 2% increase in the borrowing limit of the FRBM Act which will entail an additional lending of around Rs 20,000 crore to the State in the current fiscal year, senior official sources said.

The state government will have to spend about Rs 1,500 crore to install smart meters on agricultural electricity connections.

Free power for the agricultural sector was introduced by the late Chief Minister YS Rajasekhara Reddy in May 2004 and subsequent governments have continued it. The holder YS Jagan Mohan Reddy the government also claimed that it was developing 10,000 MW solar energy power stations to ensure free and uninterrupted electricity supply to the sector for the next 30 years.

Under the new scheme, farmers will be required to open exclusive bank accounts into which the government will credit the monthly amount of the electricity bill. Farmers will then be required to pay monthly electricity charges to the respective utility company, as per program guidelines released on September 1, 2020.

“Farmers need not pay a single rupee out of pocket,” Energy Secretary N Srikant said in an order.

The PTI news service reports that the government has released varying figures on the number of farm power connections in the state. While the 2020-21 agricultural budget as well as the 2019-20 budget Socio-economic survey said there was 18.72 lakh agricultural power connections at the end of March, the latest order issued by the Energy Secretary put the figure at 17.55 lakh.

Minister of Agriculture K Kanna Babu argued that there would be no change to the existing free energy regime. “The procedure may change but not the scheme,” he said.