Behind new agriculture DISCOMs: Farm subsidies, debt and privatisation concerns

New Delhi: Several states are looking at restructuring electricity distribution companies (DISCOMs) by separating agricultural consumers from existing utilities, as mounting losses, unpaid subsidies and farm power costs continue to put pressure on the power distribution sector. Telangana and Maharashtra have already created separate entities for agricultural power consumers, although both are yet to become fully operational. Haryana has also proposed a dedicated agriculture DISCOM, but the plan has faced opposition from power sector employees. Why Agriculture Power Is a Concern Agriculture accounts for nearly one-fifth of India's electricity consumption and remains the most heavily subsidised consumer category. Farm electricity tariffs are often below the actual cost of supply, leaving DISCOMs dependent on government subsidies and cross-subsidies from commercial and industrial consumers. Delays in subsidy payments can further affect the finances and investment capacity of utilities. According to data cited in the report, state governments spent nearly Rs 1.9 lakh crore on energy subsidies in 2024-25, with a major share going towards subsidised electricity for farmers and households. The 13 major agrarian states, which account for about 99 per cent of India's agricultural electricity sales, incurred more than Rs 1.3 lakh crore in farm power subsidies during FY25. State-owned DISCOMs...