B.S. Satish Kumar

Budget allocates subsidy of 2,500 crore, but no mention on subsidy arrears of nearly Rs. 2000 crore

Budget gives importance to power generation in a big way

Capital support of Rs. 500 crore to be provided to KPCL

BANGALORE: The subsidy provided in the State budget towards free power supply to irrigation pumpsets is being termed as “insufficient” by power experts.

According to them, the short fall in subsidy is bound to threaten the continuance of free power supply scheme which was a major poll plank of the ruling Bharatiya Janata Party.

The budget has proposed to allocate a subsidy of Rs. 2,500 crore for supplying power to IP sets and Bhagyajyothi/ Kuteerjyothi consumers. However, power experts point out that the Government is yet to provide a huge subsidy arrears to the tune of Rs. 2,148 crore to Escoms towards IP sets and Bhagyajyothi/ Kuteerjyothi consumers. Sources in the power sector said that the Escoms had sought a total subsidy of Rs. 4,400 crore including the arrears.

According to power experts, the continuation of free power supply to IP sets now hinges on the decision to be taken by the State power regulator as the Government has already indicated that it would be difficult to pay such huge subsidy arrears by appealing to the regulator to carry forward the arrears to the future years as “regulatory asset”

Power generation

For the first time, the budget has given importance to power generation in a big way by mentioning about the plans to generate an additional 12,400 MW of power in the next five years. However, all the power generation projects mentioned in the budget are those which were already in the pipeline like 4000 MW thermal power plant in Kudligi and 2,400 MW plants in Yeramarus and Yedlapur of Raichur district, two units with a capacity of 500 MW each at Bellary Thermal Power Station and 2,400 MW pit head power plant in Chattisagarh and gas based units in Bidadi and Tadadi.

It has also proposed to provide a capital support of Rs. 500 crore to Karnataka Power Corporation Limited towards equity share in a bid to raise resources for the power generation projects being taken up by it.

Sources in the power sector feel that such an equity is not sufficient for the Escoms and KPTCL to take up transmission and distribution network strengthening works.

As the irrigation pump sets are accounting for about 30 per cent of the state's power consumption, the budget has proposed to make the use of drip or sprinkler irrigation system mandatory for farmers to ensure economic use of power as well as groundwater. In this regard, “Antharaganga Micro-irrigation Corporation” is proposed to be established with an outlay of Rs.100 crore for providing financial and technical support to farmers.

Niranthara Jyothi

The budget mentions about extending the Niranthara Jyothi scheme of providing round-the-clock power supply to non-agricultural consumers in rural areas to 126 taluks in the next two years.

It has allocated a capital subsidy of Rs. 1,200 crore for implementing this scheme in 70 taluks. Interestingly, though round the clock power supply is only for non-agricultural consumers, the budget indicates that the above scheme is being implemented as per the government's endeavour to provide quality power during specified hours for supporting “agricultural operations”.