Andhra Pradesh rolls out DBT of power subsidy to farmers, gets access to Rs 1,515 Cr
By TIOL News Service
NEW DELHI, FEB 05, 2021: ANDHRA Pradesh became the second State after Madhya Pradesh to undertake power sector reforms by starting Direct Benefit Transfer (DBT) of electricity subsidy to farmers, thus becoming eligible to mobilise Rs. 1,515 crore, said the Ministry of Finance on Wednesday.
Andhra Pradesh rolled out the DBT scheme for agricultural consumers in Srikakulam district with effect from September 2020, with the rest of the State to follow in April 2021.
Successful implementation of the reform has made the State eligible to mobilise additional financial resources equivalent to 0.15 percent of its Gross State Domestic Product (GSDP), or Rs. 1,515 crore, said the Finance Ministry's Department of Expenditure.
“This has provided the muc-needed additional financial resources to the State to fight COVID-19 pandemic,” it added.
In May 2020, India enhanced the borrowing limit of the States by 2 per cent of the Gross State Domestic Product (GSDP) to meet the challenges posed by the pandemic. Half of this dispensation was linked to States undertaking reforms in One Nation One Ration Card system, ease of doing business, urban local bodies and power sector reforms.
“Power sector reforms aim at creating a transparent and hassle-free provision of power subsidy to farmers and prevent leakages,” said the department, adding“ They also aim at improving the health of power distribution companies by alleviating their liquidity stress in a sustainable manner.”
States undertaking the power sector are granted permission to raise additional financial resources of up to 0.25 percent of the GSDP, linked to reducing aggregate technical and commercial losses as per prescribed targets, reducing gap between Average Cost of Supply and Average Revenue Realisation (ACS-ARR gap), and introducing DBT to all farmers.
Besides Andhra Pradesh, Madhya Pradesh has also started DBT in Vidisha district and was given additional borrowing permission of Rs. 1,423 crore in January.
Andhra Pradesh has also completed the One Nation One Ration Card system, urban local bodies reforms and ease of doing business reforms, besides the power sector reforms.
“Therefore, the State has been granted permission to raise a total additional amount of Rs. 9,190 crore as incentive to carry out reforms in these citizen centric area,” said the ministry.
Till now, 16 States have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions of Rs. 73,257 crore.