ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Varinder JainSubscribe to Varinder Jain

Political Economy of the Electricity Subsidy

The electricity subsidy distribution pattern needs to be scrutinised to assess whether the policy benefits small producers, a normative argument often made while granting any input subsidy. In Punjab, this policy is found to ignore equity considerations while granting non-discriminatory electricity subsidies to the agricultural sector. This study highlights the existence of disparities in the flow of electricity subsidy between the advanced and backward regions. While the medium and large farmers reap the major benefits of the subsidy, the poor small farmers, especially in the backward areas, remain excluded due to their non-possession of electricity connections. In a nutshell, this paper questions the justification for introducing such a policy and puts forward the case for user charges based on open access to electricity.

Punjab: Reviving Power Sector

Rather than rush for a power sector reform package with World Bank funding, Punjab should look at the inefficiencies of its state electricity board and the internal factors that are responsible for its poor performance.
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