Shunglu panel recommends billing at least 50p/unit to farmers

Since electricity usage for the farm sector varies from state to state,it is imperative to get an authentic data in this connection and,as such,all unaccounted meters in rural areas should be metered.

“All agricultural consumers should be billed monthly like any other consumer …each agricultural consumer should be expected to pay 50 paise per unit to the Discom or their respective state electricity boards,” the Shunglu panel pointed out.

“This is necessary to enable enumeration of agriculture connections and (get) a proper estimate of power used in the farm sector,” the HLP said.

“HLP believes that after this system becomes stabilised,agriculture consumers should be obligated to pay the full cost of subsidy to Discoms/SEBs. In case state governments wish to continue to subsidise such customers,that would be a matter between them and the state government,” the panel reasoned.

The HLP also suggested that the farm sector needs to be assured at least eight hours of supply for irrigation purposes.

On the issue of operationalising ‘open access’ for the customers,the Shunglu panel said technical upgradation of State Load Dispatch Centres is a must to operationalise the ‘open access’ and strengthening the grid. Also,state-level regulators would have to appreciate the genuine commercial interests of the Discoms while deciding on the supply hours.

Observing that the states,whose distribution utilities borrowed money to finance losses,do not generate any revenue surplus,the HLP recommended creation of Special Purpose Vehicle (SPV) to set up a corporate entity consisting of a chairperson appointed by the Reserve Bank of India,which would include Chairman of Central Electricity Regulatory Authority and chief of Power Finance Corporation.

This SPV should be mandated to purchase loans,provided banks have negotiated with the states a revised re-payment schedule and that the state has agreed to regularly revise the tariff.

“RBI should provide a credit line to the SPV to purchase loans from banks,” the panel said,and suggested that in case of non-compliance of terms set by the SPV,the state government undertakings should assure the RBI that the amount defaulted would be debited to the state governments’ account with the central bank.