PM-KUSUM Scheme: Govt to Provide Financial Assistance to Farmers for Solar Pumps up to 15 HP

The government has agreed to grant PM-KUSUM beneficiaries Central Financial Assistance (CFA) for solar pumps up to 15 HP (horsepower) capacity in the north-eastern and Himalayan states, the Parliament was informed on Tuesday.

This decision was made in response to a long-standing demand from the industry. The finance ministry has agreed to allow CFA for solar pumps up to 15 HP capacity in the north-eastern and Himalayan states, keeping in mind their topography, as well as for community farming in high water table areas, with the restriction that the total number of pumps of higher capacity will not be more than 10% of the total. This was stated in a written response to a question posed in the Rajya Sabha by the Minister of State (MoS) for New and Renewable Energy Bhagwanth Khuba.

Financial assistance for solar pumps of up to 7.5 HP

In accordance with the B component, individual farmers are given financial assistance to build stand-alone solar agriculture pumps with a maximum horsepower (HP) rating of 7.5 to replace their current diesel agriculture pumps and irrigation systems in off-grid locations without access to the grid.

Pumps with a capacity greater than 7.5 HP may also be installed, however, financial help is only available for 7.5 HP pumps. In order to decarbonize the agriculture industry, the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) Scheme was introduced in 2019.

Union Minister for Power RK Singh gave states assurances that the ministry would consider raising the capacity of agriculture pumps offered under the Component B of the PM-KUSUM scheme from 7.5 HP to 15 HP or above at a Review, Planning, and Monitoring (RPM) meeting in December 2021, according to PSU Watch.

The insufficient capacity of the agriculture pumps delivered to farmers under the PM-KUSUM plan has been identified by state authorities as a significant barrier to the scheme's implementation. Agriculture pumps of 30 HP or more are necessary to draw water in numerous places where the water table is low, the states had complained.

What is Central Financial Assistance (CFA) 

The Center now offers Central Financial Assistance (CFA) for standalone solar agriculture pumps installed under Component B of the PM-KUSUM plan in the amount of 30% of the benchmark cost or the tender cost, whichever is lower. The farmer is responsible for the remaining 40% of the cost after the state government contributes 30% as a subsidy.

In the North Eastern states of Sikkim, J&K, Himachal, Uttarakhand, Lakshadweep, and the Andaman and Nicobar Islands, CFA is supplied at a rate of 50%, with the state government covering 30% of the cost and the farmer covering the remaining 20%.