Why AP Farmer Groups Oppose Direct Cash Transfer of Free Electricity Subsidies

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Concerns were expressed that the state government was giving in to pressure from the Center, as well as possible operational difficulties.

Earlier this month, the government of Andhra Pradesh issued orders announcing a major change in the state’s free electricity program for farmers. Instead of subsidies supported by the state government being transferred directly to electric utility companies, the government announced that it will now switch to a direct cash transfer system. According to a government decree (GO) issued on this subject on September 1, individual meters will be installed for agricultural electrical connections. On the basis of these statements, the government will transfer the amount of the bill to the accounts of the farmers, who will then have to pay the electricity distribution companies, or DISCOM.

This decision met with strong opposition from opposition parties, as well as farmers’ groups. Andhra Pradesh Rythu Sangham on Monday called for demonstrations at several power substations in the state. Over the past two weeks, various groups in the state, including the Rythu Swarajya Vedika and the Tenant Farmers’ Association, have also staged agitations against the Direct Benefit Transfer (DBT) system, demanding that the government revoke the prescription (GO MS 22).

This resistance was foreseen by the state government. Earlier in June, in a letter to the Center expressing his opposition to the bill amending the Electricity Act, State Secretary for Energy Nagulapalli Srikant also referred to the electricity subsidy DBT , warning that it had the potential to “create social unrest.”

Since the official announcement earlier this month, although the government has attempted to allay farmers’ apprehensions – by trying to persuade them of the program’s purported benefits – farmers have not been convinced.

Opposition to the Centre’s intervention in the electricity sector

The program is being implemented on a pilot basis in Srikakulam district, starting in September. In the government decree, Nagulapalli Srikant said that the central government, in order to provide additional funds to the state, made it compulsory for states to carry out reforms in four sectors.

“One of the main reforms is the direct benefit transfer program for the supply of electricity to farmers. There are two main orientations of the Center in this regard. From the 2021-2022 fiscal year, direct cash transfers are to be made to farmers, who will then pay the bills to the power companies. And this must be implemented in at least one district before December 31, 2020 ”, specifies the decree.

The switch to DBT was made in order to meet the Centre’s conditions for increasing borrowing limits under the Fiscal Responsibility and Budget Management Act (FRBM). These conditions imposed by the Center have been criticized in various ways, including the chief minister of Telangana, K Chandrasekhar Rao, who had accused the central government of treating states as “beggars”. KCR accused the Center of trying to dominate states, insisting that states implement reforms in four sectors to benefit from increased borrowing.

Earlier in June, Nagulapalli Srikant, in his letter to the Center on the Electricity Amendment Act, wrote on behalf of the state government that the amendments appeared to be aimed at usurping state powers. The letter stated that the proposed changes appeared to “lean towards centralizing the subject of electricity which is on the competing list”.

“It seems to offer more protection to producers than necessary, and is likely to increase the costs of purchasing electricity which constitute 75% of the cost of the electricity sector and therefore of the cost of the service. This is likely to undermine consumer interest and affect industrial growth, ”the letter noted.

Leader Rythu Swarajya Vedika in Anakapalle, Balu, said the impact of giving in to the Centre’s coercion might not be immediately visible. “Farmers fear that tomorrow, if electricity becomes a subject of central government, their voices will not reach Delhi. Right now it seems that the state government is giving in to pressure from the Center, ”he said.

Leaders of the farmer groups also fear that ceding control to the central government will pave the way for a possible privatization of the power sector, further affecting farmers.

Andhra Pradesh Rythu Sangham Krishna District President Kesava Rao also expressed the same concern. “Once the distribution companies and producers are privatized, only the transport company will remain under government supervision. All major expenses related to the laying of transmission lines, etc., will be incurred by the government, while private companies will become the main producers, ”he said.

Lack of confidence in DBT

While opposition parties have claimed that installing meters will eventually lead to a dilution of the free electricity regime for farmers, the YSRCP government has insisted that the regime is a key part of its protection program. social and an extension of the legacy of former Chief Minister and CM Jagan’s father, YS Rajasekhara Reddy.

According to Nagulapalli Srikant, each year subsidies amounting to Rs 8,353.6 crore are supported by the government for 17.55 lakh of agricultural connections, for the use of more than 12,000 million units of electricity. .

The government decree announcing the switch to DBT specifies that no charge will be imposed on farmers and that the amount of the monthly bill will be transferred to their accounts by the government at the beginning of each month. In the event of government failure, the decree guarantees that the DISCOMs will not shut down the power supply.

The state government has asserted that farmers will benefit from knowing the amount of subsidy they receive from the government. By paying DISCOM directly, farmers will have the power to demand better services and hold power companies to account, the state government said in its ordinance.

Although the installation of meters for agricultural electrical connections is inevitably a costly exercise, it will be borne by DISCOM, with the government covering the expenses. Ajeya Kallam, senior advisor to the chief minister, said the smart meters that will be installed will have many benefits. He said any problem with the electricity supply can be tracked and corrected, and short circuits and damage in transformers can be avoided through the use of smart meters.

Kesava Rao, however, called the counters a “noose” for farmers. Calling the move to DBT a betrayal on the part of the state government, he expressed concerns about the program’s implementation, noting that grants transferred in the case of other DBT programs often tend to fall. be well below the expenses incurred by the beneficiary.

The government plans to set up committees at the village, mandal and district levels to implement the program. The village committees will be responsible for identifying the beneficiaries. Logins on behalf of the previous owners will be replaced by the names of the current owners. An assistant engineer from DISCOM and an assistant task engineer will check the connections. Separate bank accounts will be created for the program so that banks do not divert the amount from DBT to farmers’ loan repayments or other purposes. The creation of these separate accounts and the verification of the electrical connections will be done on the basis of the farmers’ Aadhaar numbers.

Ajeya Kallam also said the state sharecroppers would have no problems with the program. Balu, however, claims the government has yet to identify sharecroppers lakhs to issue the Crop Grower’s Rights Card (CCRC) to enjoy the benefits of the adopted Andhra Pradesh Grower’s Rights Act. Last year. “So far, less than 3 lakh farmers have received CCRC cards, while there are at least 15 lakh tenant farmers in the state. When they can’t even identify them all, how can they guarantee that they will create accounts for all of them, ”he asked.

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