Annual rural power subsidy may top Rs4,500 crore in Karnataka

The expected liability on account of subsidy for rural electrification in Karnataka is likely to be in the range of a staggering Rs3,500 crore and Rs4,500 crore per annum in the coming years, says the Medium Term Fiscal Plan (MTFP) 2011-15.

Huge increase in the rural electrification subsidy continues to remain a serious concern for the state government, which brought out this latest report that called for certain immediate steps to prevent the power subsidy from reaching unsustainable levels in the future.

Irrigation pumpsets (IP) up to 10 HP consume approximately 35 per cent of the power available in the State, where presently more than 90% of the IP sets have not been metered and the exact quantum of electricity consumed by them is not ascertainable,said the report.

"Government for the years 2007-08, 2008-09 and 2009-10, spent Rs2297 crore, Rs1943 crore and Rs2341 crore, respectively, for the rural electrification subsidy", the MTFP said.

It also noted that 35% of the power procured by ESCOMs (electricity supply companies) from independent power producers in the State is yielding no returns as this power too is being supplied free to IP sets.