Power subsidies as DBT: Centre to accept comments from public till June 2

The Centre’s move to push through the Draft Electricity Amendment Bill that seeks to cut current subsidies and pay beneficiaries through direct benefit transfer (DBT) scheme, amid the COVID-19 lockdown, has slowed down after concerns were raised about the effect it would have on farmers and the poor.

The draft was made public on April 17 and the government gave 21 days for comments on the same. However, protests against the urgency with which the government was trying to get the bill cleared, amid the COVID-19 lockdown, forced the extension of the deadline from May 8 to June 2.

The Centre had earlier planned to bring the amendment bill in 2014 and 2018, but due to the opposition from all the states it withheld it.

Criticising the bill, S Gandhi, president, Power Engineers Society of Tamil Nadu, said comparing it with the DBT scheme for LPG was not possible.

“The DBT given to gas cylinders is possible because it is per unit (cylinder). The consumption is constant. The price may vary and accordingly the amount is transferred to consumers. But DBT in electricity is impossible. A consumer today may use 100 units today, tomorrow he can use 150 units and the day after, 50 units. So the consumption varies. For each consumer, consumption varies for each month. So the benefit must be transferred in kind (electricity) and not by money,” he said.

Burden on farmers, weavers

In Tamil Nadu, farmers get free electricity for agricultural activities. Domestic consumers get subsidised power for first 100 units, while handloom and powerloom sector gets subsidised supply for first 250 and 750 units, respectively. Overall, the state has about 2.4 crore people receiving subsidised power.

Advocate Easan, founder, Tamil Nadu Farmers Protection Association, said free electricity is a reason why there are low suicides among farmers in the state. “But the proposed bill tries to bring an end to free electricity,” he said.

Easan also recalled that Tamil Nadu has a history of bloody protests over the cost of electricity. In the 70s, Tamil Nadu Agriculturists Association headed by prominent farmer leader of Coimbatore, Narayanasamy Naidu staged protest against the hike in electricity rate. More than 15,000 farmers took part in the agitation and in a clash with police, three farmers were killed at Perumanallur in Coimbatore district. DMK was ruling in the state at that time.

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“From 1970 to 1984, a total of 64 farmers have died fighting for free electricity. In 17 places across the state, people have erected memorial stupa for those farmers,” said Easan.

In 1985, the then-AIADMK decided to give free power to farmers who owned less than 5 acres of dry land or 2.5 acres of wetland. In 1989, when DMK came to power, it made electricity free for all the farmers, the first to do so in the whole country.

K Vishnu Mohan Rao, researcher, Citizen Consumer and Civic Action Group, writing in a paper ‘The Tamil Nadu Electricity Sector: The Subsidy Narrative (1989-2016), said subsidies have been entrenched in policy and regulatory decision-making.

“The electricity subsidy narrative of Tamil Nadu does not follow a simple pattern of vote bank politics. Electricity subsidy has been seen as a tool for socio- and economic development both by the government and regulator,” he said.

In Tamil Nadu, about 21 lakh farmers receive free electricity.

“If the bill gets implemented, then the farmers first pay the amount, and then the reimbursement will be made into their account. But how many farmers are able to pay is the question that needs to be raised, given the existing problems in agriculture,” said Rao.

Besides farmers, free electricity is given to one-bulb huts in Tamil Nadu too, points out Easan. “The bill asks that such poor people too must pay to avail electricity,” he adds.

Though the government gave relaxation to textile industries, it becomes difficult for us to operate because it needs an immediate investment, said Vidyasagar Annadurai, secretary, Tamil Nadu Powerloom Federation.

Coming on the back of lockdown when the looms were inoperative and rust and damages are feared, this would be an added burden, he said.

If the bill is implemented and subsidies are stopped, about 25 lakh people who are directly and indirectly dependent on weaving will be affected and it would lead to price rise in textiles, he added.

TANGEDCO and the electricity minister were unavailable for comments.

(The earlier headline inadvertently suggested that the bill has been put off. The Centre has only extended the deadline to receive comments from the public).The Centre’s move to push through the Draft Electricity Amendment Bill that seeks to cut current subsidies and pay beneficiaries through direct benefit transfer (DBT) scheme, amid the COVID-19 lockdown, has been put off after concerns were raised about the effect it would have on farmers and the poor.