Beneficiaries of IPS Subsidy and Impact of Tariff Hike

Beneficiaries of IPS Subsidy and Impact of Tariff Hike Girish Sant Shantanu Dixit Electricity tariff for irrigation pumpsets (IPS) is one of the most controversial issues in the power sector reforms. It is believed that poor agriculturists need this subsidy and without the subsidy, the food prices will substantially increase. Analysed here is the distribution of IPS subsidy among IPS users in Maharashtra, the likely impacts of consumption-based tariff and tariff hike. The analysis shows that flat (Hp-based) tariff results in highly skewed subsidy distribution and is regressive in nature. Most farmers can pay tariff much higher than usually assumed to be possible.