The Maharashtra government issued an official order on Friday for the implementation of the “Chief Minister Baliraja Free Electricity Scheme-2024.” This initiative, also known as the Chief Minister Farmers Electricity Concession Scheme, will provide free electricity to agricultural pump customers with up to 7.5 HP capacity, starting from April 2024, with retrospective effect.
“Agriculture in India primarily relies on rainfall. However, due to significant global climate changes in recent years, there have been severe alterations in seasonal weather patterns, adversely affecting farmers. To alleviate the hardships faced by farmers in such challenging conditions, the State has approved the scheme,” the order states. The scheme was announced in the recent State Budget.
Under Section 65 of the Electricity Act, 2003, the government has the authority to subsidise any customer or category of customers and accordingly apply subsidised electricity rates. As part of this scheme, the government will waive electricity bills for eligible agricultural pump customers and will provide the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) with the equivalent amount of the subsidised rates in advance.
Customer base
As of March 2024 end, Maharashtra had 4.741 million agricultural pump customers, constituting 16 per cent of the total customer base. These customers accounted for approximately 30 per cent of the State’s total electricity consumption, with an annual usage of 39,246 million units, primarily for agricultural pumps.
The current guidelines of the Maharashtra Electricity Regulatory Commission (MERC) ensure that agricultural pumps receive a cyclic supply of electricity, available for 10/8 hours at night or 8 hours during the day on a three-phase basis across the State.
The scheme has been approved for a five-year period, from April 2024 to March 2029. However, a review will be conducted after three years to decide on its continuation for the remaining period.
Presently, the electricity rate subsidy amounts to ₹6,985 crore. Post-waiver, the subsidy will rise to ₹7,775 crore, resulting in an annual electricity rate subsidy of ₹14,760 crore to be paid by the government to MSEDCL. Should there be any changes in the subsidy amount during the scheme period, the government will adjust the compensation to MSEDCL accordingly.
In addition, the government has established a policy to provide solar agricultural pumps to any farmer who requests them, further supporting sustainable agricultural practices in the State.