The Public Accounts Committee (PAC) of Punjab Vidhan Sabha recently retracted a letter sent to the government six days ago. The letter had recommended several measures, including withdrawing free power from big farmers with landholdings above five hectares, installing meters on all agricultural tubewells, and disconnecting tubewells near the canal network.
The PAC emphasized the need to conserve natural resources for future generations to ensure the sustainability of human life on the planet. Among the recommendations, the PAC suggested that power supply to tubewells of large farmers should be metered to monitor consumption accurately and that tubewells near canals should be disconnected.
Furthermore, the PAC proposed that big farmers with land holdings above 5 or 10 hectares should not receive free power, and no farmer should be provided more than two free connections. Additionally, the committee advocated for an assured Minimum Support Price (MSP) on crops other than paddy and wheat, as they observed that farmers were increasingly cultivating paddy, leading to groundwater depletion due to the assurance of MSP.
However, the Secretary of Vidhan Sabha later informed the Chief Secretary that the letter recommending these measures stands withdrawn. The PAC chief, Bajwa, clarified that the PAC’s detailed report would be presented to the government at the end of the committee’s tenure, and the current letter was not part of their official recommendations.
Several experts have previously suggested rationalizing power subsidies, including a Group of Experts (GOE) led by economist Montek Singh Ahluwalia during the tenure of former chief minister Capt Amarinder Singh’s government. The GOE report revealed that a significant portion of the power subsidy went to medium and large farmers, while small and marginal farmers received less.
For instance, more than 1.54 lakh marginal farmers operate 89,212 tubewells, costing the government Rs 400 crore in subsidy. Small farmers with landholdings between 2.5 and 5 acres, numbering 2,07,436, own 1,60,581 tubewells, with a subsidy of Rs 720 crore. A total of 3,67,938 semi-medium farmers with landholdings between 5 and 10 acres own 3,41,978 tubewells, with a subsidy of Rs 1,533 crore. Medium farmers with landholdings between 10 and 25 acres number 3,05,220 and have 5,22,294 tubewells, incurring a subsidy of Rs 2,342 crore. Lastly, 57,707 farmers own more than 25 acres each, operating 2,37,627 tubewells, with a subsidy of Rs 1,065 crore. The combined subsidy to big and medium farmers amounts to Rs 3,407 crore.
The state’s finance department had also advised rationalizing the subsidy, suggesting that withdrawing it from medium and large farmers alone would save 56% of the free power bill. However, a decision on this matter was deferred.
The current government also faces a challenge as the power subsidy has exceeded Rs 20,000 crore, especially after providing 300 free units of power to the domestic sector.
