How Do Power Tariff Hikes Affect Vidarbha's Farmers and Poor?

thenewsdirt
Jun 24
6 min read

Across Vidarbha, the story repeats itself from small farmers powering irrigation pumps to low-income households rationing their electricity usage to avoid crushing bills.

Recent Maharashtra electricity reforms and power tariff changes promise relief, but the reality on the ground reveals a complex web of benefits and challenges that vary dramatically across different sections of society.

Free Electricity Scheme For Vidarbha Agriculture

The Chief Minister Baliraja Free Power Scheme, launched in 2024, has fundamentally altered the economics of farming across Vidarbha districts, including Buldhana, Washim, and Yavatmal.

Agricultural pumps up to 7.5 horsepower now receive free electricity for five years, directly benefiting approximately 9.48 lakh farmers across the region.

The Maharashtra power subsidy numbers tell a compelling story. In Nagpur district alone, 1.18 lakh farmers have had bills worth Rs. 39.33 crore waived completely, while Amravati witnessed 1.43 lakh farmers benefiting from a Rs. 69.91 crore waiver.

"The free electricity scheme has been a lifeline for small farmers like me," explained a farmer from Yavatmal in recent local media coverage.

This sentiment reflects a broader transformation where farmers can now allocate resources previously spent on power bills towards seeds, fertilisers, or additional labour. The scheme particularly benefits cotton and soybean cultivators, crops that demand consistent irrigation in Vidarbha's semi-arid conditions.

However, the scheme's coverage remains selective. Farmers operating pumps exceeding 7.5 horsepower or those not enrolled continue paying electricity tariffs of 6.10 Rs. per unit for metered agricultural connections.

The state's financial commitment stands at Rs. 14,760 crore in subsidies, raising questions about sustainability should government funding face constraints in future years.

The solar power component adds another dimension to the agricultural electricity supply in Vidarbha. The Chief Minister's Solar Agriculture Feeder Policy, expanded under Mukhyamantri Saur Krushi Vahini Yojana 2.0 in 2023, targets solarising 30% of agricultural feeders by 2025.

The Maharashtra cabinet allocated significant funds in 2024 to support this initiative, aiming to provide 24-hour, reliable power through 7,000 MW of decentralised solar capacity.

Results from earlier implementations show promise. Chief Minister Devendra Fadnavis noted in 2018 that solar feeders could reduce electricity costs from 6.50 Rs. per unit to 3-3.25 Rs. per unit.

A farmer in Washim captured the practical impact: "With solar feeders, we no longer need to irrigate at night, which has made farming safer and more productive." The shift from nocturnal to daytime irrigation eliminates safety risks while improving operational efficiency.

High Industrial Electricity Tariffs Challenge Vidarbha Manufacturing

Agro-industries across Vidarbha face some of India's steepest industrial electricity tariffs, creating a significant competitive disadvantage.

Cotton ginning mills and food processing units pay between 9.09 Rs. per unit for low-tension connections (0-20 kW) and 10.31 Rs. per unit for higher-capacity installations, plus fixed charges reaching 583 Rs. per month.

These Maharashtra electricity rates substantially exceed those in neighbouring states like Chhattisgarh, where industrial tariffs range from 3.90 to 8.10 Rs. per unit.

The Kelkar Committee's 2013 report highlighted how high tariffs impede industrial growth in Maharashtra, specifically recommending reduced rates for Vidarbha to boost micro, small, and medium enterprises. The recommendation gained renewed relevance as industries struggled with rising operational costs.

The Maharashtra government responded by introducing electricity duty exemptions for Vidarbha industries, announced by the Vidarbha Industries Association in 2024.

A cotton processing unit in Washim reported a 10% reduction in electricity-related costs due to these exemptions, enabling better competition with units in adjacent states.

However, the lack of detailed information about the exemption scope and duration creates uncertainty for long-term planning.

Tariff increases in 2024, averaging 7.5% for industrial consumers, have heightened concerns among industry associations about escalating production costs.

The dual challenge of high base tariffs and regular increases places constant pressure on operational margins, particularly affecting smaller units with limited financial flexibility.

Household Electricity Access Reflects Economic Divides

Electricity tariffs for households reveal stark disparities based on economic status and consumption patterns.

The Maharashtra Electricity Regulatory Commission has established a Below Poverty Line category offering electricity at 1.74 Rs. per unit with a fixed charge of 34 Rs. per month, ensuring basic access for the most vulnerable populations.

"The BPL rate has made it possible for us to keep the lights on without worrying about the bill," shared a resident of Buldhana in local newspaper coverage. This subsidised structure protects low-income households, with consumption up to 100 units priced at 7.56 Rs. per unit compared to 13.47 Rs. per unit for 101-300 units.

The tariff structure becomes progressively punitive for higher consumption levels. Non-BPL households consuming over 500 units face rates of 20.17 Rs. per unit, creating significant financial strain for middle-class families.

A Vidarbha family reported their electricity bill increasing from Rs. 3,020 for 279 units in 2023 to Rs. 4,200 for 328 units in 2024, demonstrating how modest consumption increases translate to substantial cost escalations.

Rural areas of Buldhana, Washim, and Yavatmal particularly benefit from subsidised rates, as these districts house significant populations dependent on agriculture and allied activities with limited income sources.

The tiered tariff system ensures basic electricity access while encouraging conservation through higher rates for excessive consumption.

Power Supply Reliability Undergoes Gradual Transformation

Electricity from Solar Power in Vidarbha

Historical power supply challenges plagued Vidarbha, with villages experiencing up to eight hours of daily outages in 2012.

Recent improvements have enhanced supply reliability, with rural areas nationwide now receiving an average of 22.6 hours of electricity daily, implying approximately 1.4 hours of daily outages.

While specific data for Vidarbha remains limited, the region likely benefits from similar improvements, particularly through solar feeder programme implementation.

The solar agriculture feeder initiative addresses the historical mismatch between power availability and irrigation requirements. Traditional power cuts during peak daytime hours forced farmers to irrigate at night, creating safety hazards and operational inefficiencies. Solar feeders provide reliable daytime power, aligning electricity supply with agricultural needs.

Agro-industries benefit from reduced production disruptions, improving output consistency and market competitiveness. Manufacturing processes requiring a continuous power supply experience fewer interruptions, translating to better productivity and reduced wastage. Low-income households face fewer daily disruptions, enhancing quality of life through consistent access to lighting, fans, and basic appliances.

However, national projections warned of potential 15-20 GW power shortages during May-June 2025, which eventually affected Vidarbha during peak summer demand periods.

This highlights the ongoing need for grid infrastructure investment and energy storage solutions to maintain supply reliability.

The transformation of power supply reliability intersects with agricultural productivity improvements. Farmers in Chandrapur reported benefits from daytime power availability, reducing risks associated with nighttime irrigation activities. The shift enables better crop planning and improved water management, contributing to overall agricultural efficiency.

The electricity landscape across eastern Maharashtra reflects a region caught between promise and pragmatism. While free power schemes have provided genuine relief to small farmers and subsidised rates protect vulnerable households, industrial competitiveness remains hampered by high tariffs that place local businesses at a disadvantage.

Solar initiatives show potential for long-term sustainability, but their success depends on continued government commitment and infrastructure development.

The experiences of farmers, industrialists, and households across Buldhana, Washim, and Yavatmal demonstrate that electricity reforms can deliver tangible benefits, but their ultimate impact will depend on consistent implementation and the ability to balance affordability with financial sustainability.