DBT in power sector

The Punjab Cabinet’s in-principle approval to direct transfer of cash to farmers from the next financial year instead of providing electricity for free comes on the back of the Centre making it a pre-condition for an additional loan. In the state, the reactions have been swift and on expected lines, with the Akalis expressing their fierce opposition to the proposal. Expanding the beneficiary base, checking misuse and cutting wastage should be reasons enough to keep an open mind, but as in the past, any discussion on the pros and cons is likely to get overshadowed by the politically sensitive nature of the issue.

Leveraging the DBT scheme in the electricity sector has been part of the roadmap for structural reforms, aimed at better targeting of subsidies. There has been an unending debate on whether there is such a thing as free electricity. Those advocating change say power needs to be metered, bills need to be paid and if any state government wants to give subsidy, it can do so through direct transfer. That it will benefit many more farmers than those under the free power scheme and ensure more equitable distribution of subsidy are the other arguments forwarded. However, those against it are convinced that the intent is to do away with free power and harass the farmers since there is no assurance that the cash transfer would actually take place. So, it is the intent that is being questioned and not the idea.

NITI Aayog’s draft national energy policy contends that not recovering the price of electricity that is distributed will only lead to discoms losing steam within no time. DBT, it is felt, makes the efficiencies or inefficiencies of discoms clear. Punjab’s farmers are in deep distress. Any proposal that offers a better deal needs an informed debate. If it is fundamentally flawed or unsuitable, the facts will come out. Why shy away from talking about it? Discuss the issue threadbare, but not on the streets.

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