MUMBAI: The Maharashtra government has decided to give Rs 800 crore to the Maharashtra State Electricity Board (MSEB) to subsidise electricity consumed by pumps used for agriculture as well as powerlooms in the state.

The government is making a provision for the amount in the supplementary budget to be presented in the legislature session beginning in Mumbai from Monday.

This will provide some relief to the MSEB, which is reeling under the burden of the exorbitant rate of power bought from Enron's Dabhol power plant.

The government has proposed to charge from farmers and powerloom owners tariff for a year which will be lower than that fixed by the Maharashtra electricity regulatory commission since May 1 last. Sources said the government would seek the MERC's approval for the subsidy this week.

Curiously, rich farmers will enjoy a higher subsidy. The government has lowered the tariff for farmers with loads of more than 7.5 hp and up to 10 hp. Prior to May last year, these consumers paid Rs 1,000 per hp per year. The MSEB had proposed to increase it to Rs 1,200 but MERC decided that it should be Rs 1,400. The government has now proposed that these farmers would pay only Rs 800 per hp per year.

In contrast, it has raised the tariff for less privileged farmers. Farmers with loads up to 5 hp will now pay Rs 600 per hp per year instead of Rs 500. This is less than the Rs 900 per hp per year proposed by MERC but is nevertheless higher than the previous tariff.

Interestingly, the Maharashtra government's decision goes against the Prime Minister's plea at a meeting of state power ministers last week to raise the tariff for the agriculture sector.

However, experts point out that that the subsidy given to this sector in India is nothing when compared with the massive subsidy given by the U.S. government to its farmers. The U.S. government provides the subsidy as part of an effort to capture food markets in developing countries and increase their dependence on the U.S. The U.S. subsidies can play havoc with the livelihood of farmers, particularly the poor ones, in India, they say.

N.D. Patil, chairperson of the coordination committee of the ruling Democratic Front in the state, said farmers in India actually got a net negative subsidy of minus two per cent. Most of the subsidies for the agriculture sector went to the richer farmers, he said.

Another argument is that, in effect, farmers get a very poor quality of power, which damages their pumps. Besides, farmers point out, they cannot use pumps during the summer as there is no water to draw, and in the monsoon months there is little use of pumps.

Farmers who have no pumps and who are poor get no subsidy at all. The government has justified the subsidy for other farmers on the ground that legislators had strongly opposed the power tariff hike in the winter session of the legislature.

The subsidy will not apply to arrears of agriculturists and powerloom owners. The government has decided to write off the dues of powerloom owners but not farmers. Powerloom owners who pay 45 per cent of the dues by March 15 will have their remaining dues written off. The concession is for dues up to December, 1999.

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