{"id":97914,"date":"2026-04-12T10:58:55","date_gmt":"2026-04-12T05:28:55","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=97914"},"modified":"2026-04-13T11:46:48","modified_gmt":"2026-04-13T06:16:48","slug":"solarisation-as-fiscal-reform","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/solarisation-as-fiscal-reform\/","title":{"rendered":"Solarisation as Fiscal Reform &#8211; Recasting India\u2019s Power Subsidy Regime"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>Solarisation as Fiscal Reform Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s States collectively spend nearly <\/span><b>\u20b92.4 lakh crore<\/b><span style=\"font-weight: 400;\"> annually on electricity <\/span><b>subsidies<\/b><span style=\"font-weight: 400;\">, primarily for agriculture and domestic consumers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Union government is increasingly repositioning its flagship solar schemes not merely as clean energy initiatives, but as fiscal reform tools aimed at gradually eliminating this subsidy burden.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">With India\u2019s installed power capacity reaching 535 GW (March 2026)\u2014including about 150 GW solar and 54% from non-fossil sources\u2014solarisation is emerging as a key instrument in both energy transition and public finance restructuring.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Reframing Solar Policy &#8211; From Climate to Fiscal Strategy<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Programmes like <\/span><b>PM<\/b><span style=\"font-weight: 400;\">&#8211;<\/span><b>KUSUM<\/b><span style=\"font-weight: 400;\"> (for agriculture) and <\/span><b>PM Surya Ghar<\/b><span style=\"font-weight: 400;\"> (for households) are now being framed as mechanisms to &#8211;<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Replace subsidised grid electricity with low-cost solar power<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Reduce States\u2019 recurring subsidy outgo<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Over time, solarisation could eliminate cross-subsidy burdens, especially those borne by industrial and commercial users.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Key Schemes Driving the Transition<\/b><\/h2>\n<ul>\n<li aria-level=\"1\"><b>PM-KUSUM (Agricultural solarisation):<\/b>\n<ul>\n<li><b>Focus<\/b><span style=\"font-weight: 400;\">: Solarisation of agricultural feeders and installation of standalone solar pumps.<\/span><\/li>\n<li><b>Impact<\/b><span style=\"font-weight: 400;\">: Reduces dependence on expensive grid power and diesel pumps. Enables decentralised solar generation near substations.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Case study (Maharashtra model):<\/b>\n<ul>\n<li><b>Mukhyamantri Saur Krishi Vahini Yojana (MSKVY)<\/b><span style=\"font-weight: 400;\">: Launched in <\/span><b>2017<\/b><span style=\"font-weight: 400;\"> for installing decentralised solar plants of 2-10 MW capacity within a 5 km radius of agriculture-dominated substations.<\/span><\/li>\n<li><b>Outcomes<\/b><span style=\"font-weight: 400;\">: Reduction in cross-subsidy charges, ability to lower tariffs for consumers, and replacement of diesel pumps with solar pumps.<\/span><\/li>\n<li><b>MSKVY 2.0 target<\/b><span style=\"font-weight: 400;\">: 16 GW. Far exceeds Central Financial Assistance (CFA) under PM-KUSUM (~4.5 GW).<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>PM Surya Ghar (Rooftop solar for households):<\/b>\n<ul>\n<li><b>Conventional model: <\/b><span style=\"font-weight: 400;\">Demand-driven, with about 35 lakh households covered. However, poor households with free\/subsidised electricity lack incentive to adopt solar.<\/span><\/li>\n<li aria-level=\"2\"><b>Utility-Led Aggregation (ULA) model:<\/b>\n<ul>\n<li><b>Utility installs rooftop solar: <\/b><span style=\"font-weight: 400;\">Either through own capital or RESCO (renewable energy service company) model.<\/span><\/li>\n<li><b>Benefits: <\/b><span style=\"font-weight: 400;\">Zero upfront cost for consumers. States save on domestic subsidy expenditure.<\/span><\/li>\n<li><b>Coverage: <\/b><span style=\"font-weight: 400;\">Approved in States like Assam, Odisha, Bihar, Chhattisgarh, Andhra Pradesh.<\/span><\/li>\n<li><b>Target<\/b><span style=\"font-weight: 400;\">: 30 lakh installations through ULA and another 35 lakh through the normal mode, bringing the total to approximately 1 crore by March 2027 \u2014 the Surya Ghar scheme\u2019s headline target.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Institutional and Policy Challenges<\/b><\/h2>\n<ul>\n<li><b>Fragmented governance: <\/b><span style=\"font-weight: 400;\">The Union Ministry of New and Renewable Energy (MNRE) lacks administrative authority (Under the Electricity Act, 2003, and the Energy Conservation Act, 2001) over India\u2019s renewable energy sector.<\/span><\/li>\n<li aria-level=\"1\"><b>Domestic manufacturing vs cost efficiency:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The <\/span><b>ALMM <\/b><span style=\"font-weight: 400;\">(Approved List of Models and Manufacturers) mandates use of domestic solar equipment in government-backed projects to promote Atmanirbhar Bharat in solar manufacturing.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">However, domestic equipment is costlier and in limited supply, and States may prefer cheaper imports (e.g., Chinese solar cells) potentially undermining domestic industry.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Behavioural and structural constraints: <\/b><span style=\"font-weight: 400;\">Poor households lack economic incentive to shift to solar, vendors face supply constraints and cost pressures, and States vary in fiscal capacity and political willingness.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Way Forward<\/b><\/h2>\n<ul>\n<li aria-level=\"1\"><b>Policy and institutional reforms:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The MNRE should be recognised as the \u201cCentral Government\u201d in all matters pertaining to renewables under the Electricity Act, 2003.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Strengthen coordination between the MNRE, Ministry of Power, and the State DISCOMs.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Scaling innovative models: <\/b><span style=\"font-weight: 400;\">Expand ULA for inclusive solar adoption. Replicate Maharashtra\u2019s decentralised solar feeder model across States.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Balancing domestic manufacturing and affordability: <\/b><span style=\"font-weight: 400;\">Rationalise ALMM norms to ensure availability and affordability of domestic equipment. Provide incentives for domestic manufacturing scale-up, and technology upgrades.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fiscal incentivisation for States: <\/b><span style=\"font-weight: 400;\">Link central assistance to reduction in subsidy burden, adoption of solarisation models.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Conclusion<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s solar push is undergoing a strategic shift\u2014from a climate-centric narrative to a fiscal sustainability framework.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">By leveraging schemes like PM-KUSUM and PM Surya Ghar, the Centre aims to transform recurring subsidy liabilities into capital investments in clean energy.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, success hinges on resolving institutional fragmentation, manufacturing constraints, and behavioural barriers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If effectively scaled, solarisation could become a <\/span><b>cornerstone <\/b><span style=\"font-weight: 400;\">of both India\u2019s energy transition and fiscal federalism reform.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/www.thehindu.com\/news\/national\/centre-nudges-states-to-view-farm-solarisation-as-a-route-to-wiping-off-24-lakh-crore-subsidy-bill\/article70850322.ece\" target=\"_blank\" rel=\"nofollow noopener\"><b>TH<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Union government is increasingly repositioning its flagship solar schemes not merely as clean energy initiatives, but as fiscal reform tools.<\/p>\n","protected":false},"author":19,"featured_media":98040,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,6811,22,59],"class_list":{"0":"post-97914","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-solarisation-as-fiscal-reform","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/97914","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=97914"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/97914\/revisions"}],"predecessor-version":[{"id":98055,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/97914\/revisions\/98055"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/98040"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=97914"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=97914"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=97914"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}