ISSUES IN ENERGY SUBSIDIES FOR IRRIGATION PUMPING - A CASE-STUDY FROMMAHBUBNAGAR DISTRICT, ANDHRA-PRADESH, INDIA

The provision of power for irrigation pumping has been an important po licy in India since the 1960s. It includes huge investments in the nat ional grid and subsidies to farm households for the use of electricity , involving major losses to the state electricity boards. The governme nt of India is now reviewing its subsidies policy. The present paper s eeks to contribute to the current debate by examining the relative ben efits of use of electricity vis-g-vis diesel engines for irrigation pu mping in a backward rain fed area in the semi-arid region of Andhra Pr adesh. It demonstrates the cost advantage to farmers of electric pumps ets over diesel engines given the low operational costs arising from h igh subsidies. The losses incurred by the Andhra Pradesh State Electri city Board (APSEB) and the difficulties it encounters in improving the power supply situation are also discussed. It concludes with a call f or a revision of the tariff rates.