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India's energy policy of subsidized power supply to the agricultural sector has significantly contributed to a high level of dependence on ground water supply for irrigation in rural areas. Stakeholders – energy companies, farmers and other power users – are trapped in a continuous downward spiral of deteriorating power service delivery, near-bankrupt electricity companies, declining ground water levels, and stagnant or declining agricultural productivity. Yet, the dynamics of electoral politics has made it almost impossible to normalize the level of electricity tariffs. This article proposes a scheme for direct delivery of the power subsidy to farmers in a cost-effective, transparent and targeted manner. The scheme makes use of segregated electricity feeders, minimum energy support for farmers, smart metering and subsidy delivery via ICT-based instruments in order to maximize benefits for all stakeholders by offering a better power supply and transparent subsidy delivery mechanism to reduce inefficiencies in the current system and breakout of the downward spiral.
Gulati et al. (Thu,) studied this question.