Punjab spent Rs 1.25 lakh crore on free farm power since rollout

From January 1997 when the free farm power subsidy was rolled out till March this year, the Punjab Government has spent a whopping Rs 1.25 lakh crore on the scheme.

While the annual subsidy bill stood at Rs 604.57 crore in the financial year 1997-98, it has seen a 17-fold rise to Rs 10,000 crore for 2025-26. In addition to farmers, Punjab also provides subsidised power to domestic and industrial consumers. The total power subsidy budget for various sections during the current financial year is around Rs 20,500 crore.

The overall subsidy bill had for the first time surpassed the Rs 1,000 crore mark in 2005-06 when an amount of Rs 1,435 crore was allocated. Of it, Rs 1,385 crore was for free farm power alone. In 2007-08, the total subsidy bill exceeded Rs 2,000 crore, touching Rs 2,848 crore. Of it, Rs 2,284 crore was the cost of free agricultural electricity.

“Of the total budget of Rs 2,36,080 crore for the 2025-26 fiscal year, Rs 20,500 crore will go towards power subsidy. While nearly Rs 10,000 crore is for the farming sector (the highest subsidy bill for any category), Rs 7,614 crore is for domestic consumers and Rs 2,893 crore for the industry,” according to the state government data. Nearly 14 lakh agriculture tubewells are being provided free power in the state. Punjab had 2.8 lakh tubewells in the late 1980s.

Apart from the hefty subsidy burden, the use of free power to run tubewells has been worsening the groundwater crisis in Punjab. “With the state government advancing by nearly a month the paddy-sowing date to June 1, lakhs of tubewells will exert extra pressure on groundwater resources till the monsoon arrives,” said an environmentalist.

A few years ago, an expert committee formed by the National Green Tribunal and comprising members from the Punjab Agriculture University, Central Pollution Control Board and the Punjab Pollution Control Board had strongly recommended that the sowing season should start around June 25. Experts have warned that the groundwater level had been declining by nearly 1 metre annually, and that the early sowing of paddy was “putting extra pressure not only on groundwater, but also on soil health”.

According to data from Punjab State Power Corporation Limited, the districts with critical water tables continued to have the highest number of tubewells. “Ludhiana leads with 1.17 lakh tubewells, followed by 99,581 in Gurdaspur, 93,946 Amritsar and 93,669 Sangrur. All tubewells will run more until the monsoon hits Punjab as paddy cannot sustain without water and the state government has committed to providing at least eight hours of free power to run tubewells,” said All India Power Engineers Federation spokesperson VK Gupta.

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