This working paper published in Agence Française de Développement (AFD) informs that while about 70% of Indian electricity is carbon-based, a quarter of the nation’s consumption goes into agriculture, to extract groundwater for irrigation. Improving the energy efficiency of Indian agriculture is thus a critical issue for the world at large, from both a climate change and energy security perspective.
Yet, the picture is made immensely complex given the entrenched policy of providing “free power” to farmers since the Green Revolution of the 1970s. Over the past two decades, a neo-liberal discourse shared by many Indian and international technocrats has emerged that frames “free power” as a unilateral problem that leads to economic inefficiencies affecting utilities, the state governments but also the farmers themselves through the unfair allocation of subsidies.
The solution that is hence most advocated is to revise and increase tariffs and to improve the technical efficiency of India’s 23 million pumps. Key international donors have promoted this line of thinking, making higher tariffs and universal metering a precondition for financing power-sector reforms.
Through qualitative data gathered in interviews and fieldwork in four Indian states (Andhra Pradesh, Maharashtra, Gujarat and West Bengal), this work challenges this perspective. It contends that the raising of electricity prices would deeply and unavoidably aggravate rural poverty as well as endanger food security.
Whether one likes it or not, moreover, electricity subsidies have become a cornerstone of rural politics in India, as the Congress Party hegemony was challenged by regional parties with strong support among the peasantry. Both pragmatism and effectiveness now call for looking at “free power” as a constraint to work with, rather than a problem to work against. At the same time, concentrating solely on technically improving the efficiency of pumps might further aggravate the speed at which water tables are depleted.
There is thus a need to first optimise water demand in agriculture through a broader approach to the water-energy nexus. This would include massive state investments to improve surface irrigation, groundwater table management, irrigation technologies, agricultural practices (including organic agriculture and crop diversification) as well as India’s food procurement policies. The support of the international community, we believe, should be rethought in this light.
Backdrop
Free power for farmers is a unique feature of the Indian electricity supply industry. Most Indian states have ensured agricultural consumers a free, or highly subsidised, often unmetered electricity supply. After electricity was put under public control and local states received the authority to set electricity prices in 1948 following the Electricity (Supply) Act, electricity pricing rapidly emerged as a powerful political tool and stake (Swain, 2006; Badiani and Jessoe, 2010).
Since then, political parties have campaigned for a subsidised or free electricity supply for agricultural consumption, in anticipation of capturing farmers’ political support. Free power has become such a political node that, in recent years, it has gained a prominent place in party manifestoes. Elections are sometimes won or lost on the basis of political parties’ commitment to this policy. Although the free-power policy is implemented as a political or vote-gaining tool, it has been marketed as a policy for increasing agricultural yields, ensuring food security and reducing rural poverty.
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