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Cpanel
 (Solar System demonstration to villagers. Image courtesy:ADB)
 
Modi Government’s idea of ‘solar empowerment of farmers’ is expected to be rolled out with clipped wings – massive cut in projected funding and uncertainty over some operational issues. 
The Government has marketed the proposed as a major means to doubling farmers’ income by 2022 & for promoting sustainable, cost-competitive farming. 
Named Kisan Urja Suraksha Evam Utthaan Mahabhiyan (KUSUM), the proposed centrally sponsored scheme was recently subjected to intense scrutiny at an inter-ministerial standing committee. 
The Committee advised Ministry of New and Renewable Energy (MNRE) to restructure KUSUM keeping in view funds crunch. The Committee also directed the Ministry to address host of issues especially arranging matching contribution of funds by the States
The Scheme requires Rs 1.44 lakh crore investment to create decentralized, solar power generation capacity of 28,500 MW at farms and wastelands. It also provides for installation of 27.5 lakh solar pumps (17.50 lakh standalone + 10 Lakh Grid-connected) and 50,000 Grid-connected tube-wells/lift irrigation and drinking water projects.
The surplus power generated under the scheme is to be sold to power distribution companies. The funds for the scheme have to come from the Centre, the States, banks and the farmers.
The Committee also suggested that KUSUM’s components should be first put to pilot testing to assess their benefits to farmers. 
The Committee recommended allocation of only Rs 10,000 crore to KUSUM for its implementation over three years beginning 2018-19. The scheme now requires clearance from Cabinet Committee on Economic Affairs (CCEA). 
MNRE had sought Rs 40,650 crore Central funding for scheme’s execution over nine years ending 2026-27. 
The Committee has directed MNRE to meet balance requirement of Rs 30,650 crore through Extra Budgetary Resources (EBR) for which Finance Ministry’s approval should be obtained.
The Committee also advised MNRE to approach Finance Ministry and commercial banks for tying up loans to be extended to farmers covered by KUSUM.
It also wants MNRE to evaluate scheme after two years for extension beyond 2021-22.
At the Committee meeting, a top official from Finance Ministry noted that the scheme required annual funding of Rs 10,000 crore, as compared to MNRE’s existing annual budget of about Rs 5000 crore. 
He added: “An equal share is proposed to be provided by the State Government. Whether funds of the scale required for the scheme have been tied up by the States. This is very essential for smooth implementation of the scheme of this magnitude”.
He pointed out that National Clean Energy Fund (NCEF) can’t support the scheme. Requisite funding might not thus be available from constrained fiscal space. It is saddled with competing demand for funds. MNRE should thus explore alternative sources of funding.
MNRE should also resolve the issue of fate of diesel pumps & the likely financial liability of farmers on account of replacement of such pumps with solar ones.
Similarly, it should work out arrangement for training farmers, who agree to provide services such as watch and ward, and cleaning of solar panels to earn additional income.
Yet another issue that needs be resolved is the manner in which farmers should be compensated for the period, during which solar power plant is erected on stilts over their farms. An official at the meeting suggested that farmers should be paid in advance, a part of lease fee that can be later adjusted against future payments.
The farmer can grow crops under solar panels installed on stilts at adequate height from the ground. The impact of same crop grown under solar panel on farm yield would require scrutiny. 
KUSUM’s four components are:  A) ground mounted solar power plants (upto 2 MW each), B) standalone pumps, 3) solarisation of grid-connected pumps and 4) tubewells / lift irrigation projects.
In the current year, component A would be have no target and thus zero funds allocation, Component B’s target is 2062.5 MW, component C target is 750 MW and component D target is 250 MW. Thus, KUSUM envisages installation of total generation capacity of 3062.5 MW in the first year. 
The capacity creation target would be more than doubled to 7812.5 MW in 2019-20. The target for 2020-21 is 8062.5 MW and for subsequent year 9312.5 MW. Thus, the total target for four years ending 2021-22 is 28,250 MW.
In May 2018, MNRE had estimated Fund requirement over nine years ending 2026-27 at Rs 48,838 crore on the basis of Ministry’s benchmark cost dated 17 March 2017 for BCD components. MNRE has now whittled down the projected requirement by Rs 8188 crore to Rs 40,650 crore on the basis of revised benchmark cost. 
Both power and agriculture ministries have suggested that the capacity of solar pumps be increased to 10 Horsepower under component B &C.
Ministry of Water Resources has proposed installation of water meters with solar pumps to monitor groundwater withdrawal. It also wants KUSUM to converge with Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) to promote micro-irrigation.                
 
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