Free power

Electricity for agricultural pumping in Punjab has been free since 1997. About fourteen lakh tubewells run on it.

The policy is politically untouchable. Every party has promised to keep it and none has proposed removing it, because a farmer whose margin is already negative cannot absorb the cost and because the constituency is decisive.

The consequences are a subsidy bill of many thousands of crores a year carried by the state and by the power utility, cross-subsidised from industry, which raises industrial power costs and is one reason Punjab has lost manufacturing to neighbouring states.

It also removes any price signal on groundwater, which is the resource actually being consumed. A tubewell that costs nothing to run will run.

Every serious analysis of Punjab's water crisis identifies free power as a central mechanism, and no analysis has produced a politically survivable alternative. Direct benefit transfer has been proposed repeatedly and never implemented at scale.

Free power to agriculture was introduced in 1997, withdrawn, and restored, and it has been politically untouchable since. The cost appears as a subsidy paid by the state to the power utility.

Because the pump costs nothing to run, there is no price signal at all on groundwater. The link between free power and the falling water table is the most direct causal chain in Punjab's problems.

Metering agricultural connections has been attempted and abandoned more than once. Without meters there is no measurement of how much water is actually lifted, which means the central fact of the state's crisis is estimated rather than known.

What we don't know

  • Whether any pilot of direct transfer in place of free power has been evaluated. Results are not public.

Where to check this

  1. Central Ground Water Board assessments. Central Ground Water Board - groundwater resource assessment ↗

Named but not linked. These are real, findable documents. This project has not consulted them for this page.

  • Punjab State Power Corporation Limited annual reports.
  • Academic and policy analysis of Punjab's agricultural power subsidy.

This page has not yet been read through by the editor. Treat it with more caution than the rest.

How this page was written. The text is compiled from the standard published histories and reference works, not from a document held in hand. Nobody from this project has visited the place or read the archive. The list above is where a reader can go to check it, not a record of what was consulted line by line. Dates and figures are the received account. If you hold something better, write in and it will be corrected.

This is one of 220 accounts in When the Water Went, the chapter of this site covering Punjab since 1947: land, water, debt and everything after.