Governance and Service Delivery of Agrarian Electricity Subsidy in India: A Systematic Review
Mehul Kumar and K C Smitha
Abstract
This study examines the evolution, governance, and delivery of agrarian electricity subsidies across Indian states through a systematic review of literature. Adopting a multidisciplinary perspective and guided by the analytical framework of populism, it situates electricity subsidies within broader debates on populism, welfare, and freebies. The study reveals through its historical analysis that the evolution of electricity subsidies was rooted in post-independence agricultural reforms aimed at promoting irrigation and productivity. Over time, regional parties emerged in several states with a strong support base among farmers, largely because they understood farmers’ demands better than national parties, particularly the need for affordable electricity. The study further notes that post liberalisation with rising electricity prices, states expanded subsidy programmes to maintain farmer support. The examination of equity highlights that benefits are often skewed toward large and medium farmers, leaving small and marginal farmers disadvantaged. The analysis of fiscal efficiency exposes the mounting financial burden on DISCOMs, resulting in long-term economic strain on state finances. Finally, the assessment of ecological sustainability uncovers the overexploitation of groundwater and declining environmental balance. While electricity subsidies have bolstered agricultural productivity and rural livelihoods, they continue to face significant challenges.