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Political Economy of Electricity Subsidy: Evidence from Punjab

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  • Jain, Varinder

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.

Suggested Citation

  • Jain, Varinder, 2006. "Political Economy of Electricity Subsidy: Evidence from Punjab," MPRA Paper 240, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:240
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    File URL: https://mpra.ub.uni-muenchen.de/240/1/MPRA_paper_240.pdf
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    References listed on IDEAS

    as
    1. Ellis,Frank, 1992. "Agricultural Policies in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521395847, November.
    2. Singh, Baldev, 1992. "Groundwater Resource and Agricultural Development Strategy: Punjab Experience," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 47(1).
    3. Martin J. Osborne & Al Slivinski, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(1), pages 65-96.
    4. Joshi, P. K. & Tyagi, N. K., 1991. "Sustainability of Existing Farming System in Punjab and Haryana - Some Issues on Groundwater Use," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 46(3), July.
    5. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Jain, Varinder, 2018. "Powering India at Household Level: State Effort, Issues and Concerns," MPRA Paper 87170, University Library of Munich, Germany.
    2. Rehman, I.H. & Kar, Abhishek & Banerjee, Manjushree & Kumar, Preeth & Shardul, Martand & Mohanty, Jeevan & Hossain, Ijaz, 2012. "Understanding the political economy and key drivers of energy access in addressing national energy access priorities and policies," Energy Policy, Elsevier, vol. 47(S1), pages 27-37.
    3. Kato, Atsushi & Fukumi, Atsushi, 2020. "Political economy of agricultural electricity tariffs: Rural politics of Indian States," Energy Policy, Elsevier, vol. 145(C).
    4. Sidhu, Balsher Singh & Kandlikar, Milind & Ramankutty, Navin, 2020. "Power tariffs for groundwater irrigation in India: A comparative analysis of the environmental, equity, and economic tradeoffs," World Development, Elsevier, vol. 128(C).
    5. Mason Gaffney, 2016. "Nature, Economy, and Equity: Sacred Water, Profane Markets," American Journal of Economics and Sociology, Wiley Blackwell, vol. 75(5), pages 1064-1231, November.

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    More about this item

    Keywords

    Political economy; Electricity Subsidy; Agriculture;
    All these keywords.

    JEL classification:

    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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