Political Economy of Electricity Subsidy: Evidence from Punjab

Varinder Jain ()

MPRA Paper from University Library of Munich, Germany

Abstract: The electricity subsidy distribution pattern needs to be scrutinised to assess whether the policy benefits small producers, a normative argument often made while granting any input subsidy. In Punjab, this policy is found to ignore equity considerations while granting non-discriminatory electricity subsidies to the agricultural sector. This study highlights the existence of disparities in the flow of electricity subsidy between the advanced and backward regions. While the medium and large farmers reap the major benefits of the subsidy, the poor small farmers, especially in the backward areas, remain excluded due to their non-possession of electricity connections. In a nutshell, this paper questions the justification for introducing such a policy and puts forward the case for user charges based on open access to electricity.

Keywords: Political economy; Electricity Subsidy; Agriculture (search for similar items in EconPapers)
JEL-codes: H23 P26 (search for similar items in EconPapers)
Date: 2006-09-23
New Economics Papers: this item is included in nep-agr, nep-cwa, nep-ene and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Economic and Political Weekly 38.41(2006): pp. 4072-4080

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:240

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