A daytime power compact for agriculture—enabled by feeder reform and solarisation—can replace erratic supply with reliable service, making subsidies transparent and easing financial stress on distribution utilities
India’s electricity sector has a silence at its centre. Somewhere between what the distribution company bills, what the farmer pays, and what the state treasury subsidises, a large sum disappears into the category of ‘agricultural losses’. Its true composition remains unknown: real subsidy, technical loss on weak rural networks, theft or under-billing, or simple inefficiency protected by opacity.
This silence was manageable when the power policy could survive on periodic bailouts. It is no longer manageable in an era of renewable integration, fiscal strain, and rising demand for reliable electricity. Between 2017–18 and 2022–23, the financial stress of India’s distribution utilities remained severe. According to the Power Finance Corporation’s Report on Performance of Power Utilities, 2022–23, aggregate losses for distribution utilities rose to INR 57,223 crore. That is why agricultural power is no longer a peripheral welfare question but a structural one. It shapes DISCOM balance sheets. Those balance sheets shape network investment. Network investment shapes reliability, industrial competitiveness, and the affordability of the energy transition itself.
India’s energy transition will not be determined solely in generation parks and transmission corridors; it will be shaped decisively at the distribution edge.
India’s energy transition will not be determined solely in generation parks and transmission corridors; it will be shaped decisively at the distribution edge. The most practical entry point into this problem is not tariff shock, privatisation rhetoric, or another abstract restructuring plan. It is reliability—more specifically, a credible promise of assured daytime electricity for agriculture. This is the reform that the political economy can tolerate, and that new technology can support. It is, in effect, the electricity contract India never wrote.
Maharashtra has already shown the outline of such a compact through solarisation of agricultural feeders. Under the Mukhyamantri Saur Krushi Vahini Yojana 2.0, the state initially set an objective of solarising 30 percent of agricultural feeders by 2025 through about 7,000 MW of decentralised solar capacity for daytime farm supply; this target has since been expanded to 16,000 MW, as per a September 2024 government decision, with the stated aim of achieving daytime supply for 100 percent of agricultural pump consumers. The logic is simple: power agriculture during the day, closer to the feeder, with a lower subsidy burden and better service quality.
Farmers, after all, do not experience the present regime as ‘free power’. They experience it as erratic supply, damaged pump sets, burned transformers, and sleepless nights waiting for electricity that may or may not come. Free power, in practice, often means unusable power. That distinction matters. The subsidy is politically defended as a benefit, but for many farmers, the real experience is not abundance—it is uncertainty. Irrigation cannot be planned properly. Crops are over-watered in anticipation or under-watered in the gaps between supply windows. Repair costs are privatised even when tariffs are subsidised. In such a system, reform framed only as metering or price correction is ill-fated. Only when reform is framed as reliable service does it have a chance.
Daytime supply has always mattered, but it has become feasible only now in a way it was not earlier. Solar power has changed the economics by aligning the cheapest new generation source with the natural timing of agricultural pumping.
Farmers often accept rationing more readily than randomness: supplying power for fixed daytime hours at usable voltage on a known schedule is a stronger and more legitimate promise than keeping it free without certainty over timing. Predictability has value: it reduces motor damage, lowers transformer stress, allows irrigation planning, and creates a visible service standard against which the utility can be held accountable.
Daytime supply has always mattered, but it has become feasible only now in a way it was not earlier. Solar power has changed the economics by aligning the cheapest new generation source with the natural timing of agricultural pumping. At the same time, rising renewable penetration has made feeder-level invisibility more costly. Poor metering, unmanaged farm load, and the inability to distinguish load from loss now affect procurement, balancing, and voltage management across the wider system. Fiscal pressure has reinforced the same conclusion. The Government of India has itself moved in this direction through feeder segregation under the Revamped Distribution Sector Scheme. As of February 2025, works amounting to INR 40,509 crore had been sanctioned under RDSS, covering 31,119 feeders. The convergence is striking: what was once a politically difficult reform now appears operationally sensible, fiscally attractive, and technologically feasible.
There is also a truth that power-sector debates often skip: electricity reform is groundwater reform by other means. In much of India, subsidised and unmetered farm power has made the marginal cost of pumping groundwater close to zero. The result has been entirely predictable: aquifers have been depleted, and cropping choices have shifted toward water-intensive varieties. Electricity policy has quietly become water policy, though the state rarely admits it.
Punjab is the clearest example. According to the National Compilation on Dynamic Ground Water Resources of India, 2024, published by the Central Ground Water Board, 19 of Punjab’s 20 assessed districts are classified as over-exploited. That is not merely a water statistic but an electricity statistic; it is the electricity regime that has helped create the pumping regime.
A daytime supply compact does not solve groundwater depletion on its own, but it changes the operating discipline. It reduces the incentive to run pumps all night whenever power becomes available and shifts behaviour from opportunistic extraction toward scheduled irrigation. It works with farmer rationality. In water-stressed states, that is a major political and ecological advantage. Daytime power also becomes a key element of water security.
Delivering reliable daytime electricity for agriculture depends entirely on sequencing. The first stage is physical readiness: feeder segregation, transformer rehabilitation, voltage management, and feeder metering sufficient to measure input energy. The second stage is operational credibility: fixed daytime hours, published schedules, and a grievance redressal mechanism that functions during critical irrigation periods. The reform becomes real only when the farmer experiences the utility as a contractual service provider rather than an uncertain patron. Only then does the third stage of digital optimisation—remote switching, pump controllers, time-of-day signals, and automation—add value. Indian infrastructure reform habitually fails because it announces digital transformation before laying the analogue foundation.
Once the cost of subsidised agricultural supply is ring-fenced outside the DISCOM’s core balance sheet, the utility’s underlying financial position becomes far more transparent and potentially viable.
This, in turn, requires institutional design. A minimum reform should ring-fence agricultural distribution within the DISCOM. It involves separate accounting, audited subsidy claims, feeder-level reporting, and performance standards tied to hours and quality of supply. That alone would make the subsidy visible, bounded, and governable. In larger states, a dedicated SPV for feeder solarisation and rural network restoration may be necessary to aggregate procurement, standardise execution, and raise capital outside the DISCOM’s stressed balance sheet. This would help ring-fence these investments from the DISCOM’s wider financial weaknesses while ensuring that agricultural supply, rather than competing urban and industrial demands, becomes the SPV’s sole operational priority.
Once the cost of subsidised agricultural supply is ring-fenced outside the DISCOM’s core balance sheet, the utility’s underlying financial position becomes far more transparent and potentially viable. It can then operate as a commercially disciplined entity, focused on delivering reliable, high-quality power to paying consumers who currently bear the cost of the agricultural cross-subsidy.
The broader gains would be considerable. In Maharashtra, MSEDCL reported 4,756,094 agricultural pump sets energised as of March 2023, underscoring the sheer scale of farm-linked electricity demand in the state. At this scale, agricultural supply cannot remain financially opaque without distorting the wider electricity economy. Industrial and commercial consumers bear the burden through higher tariffs and cross-subsidy, while the utility bears it through weak cash flow and chronic under-investment.
Power-sector reform rarely fails at the policy declaration stage; it fails when agricultural power must shift from an informal political accommodation to a monitored service obligation. That moment arrives when feeder schedules must be publicly honoured, when subsidy claims must correspond to measured supply rather than inherited assumptions, and when the local political system must stop treating transformer exceptions and unscheduled restorations as part of its discretionary domain. Administrative experience demonstrates that momentum falters at this stage. Reform enjoys broad support while it exists only as a scheme, a target, or a speech. Hesitation sets in when it begins to shift responsibility downward and make performance visible upward.
Power-sector reform rarely fails at the policy declaration stage; it fails when agricultural power must shift from an informal political accommodation to a monitored service obligation.
Gujarat’s Jyotigram Yojana and Maharashtra’s Mukhyamantri Saur Krushi Vahini Yojana together show that this is not a theoretical reform proposition but a political proof of concept. When agricultural supply is reorganised around reliability, visibility, and a clear service promise, reform becomes electorally manageable and administratively durable. Maharashtra illustrates this with exceptional clarity. The real resistance has rarely been to the idea of daytime power itself, but to the discipline, transparency, and loss of informal discretion that a credible daytime power compact necessarily entails.
This is why agricultural power reform is also about India’s industrial future. It affects manufacturing competitiveness, the viability of commercial loads, and the economics of emerging digital infrastructure. Data centres, in particular, require not just large volumes of power but contractual assurances on continuity, voltage quality, and predictable tariff treatment over long horizons. A DISCOM weighed down by balance-sheet fragility cannot credibly provide those guarantees at scale. A financially weak distribution system, therefore, is a constraint on India’s AI and data economy.
So the Daytime Power Compact should be understood not as a technical tweak but as a political settlement. The farmer gives up the fiction of unlimited, unmeasured, and unreliable access. The state gives up opacity, gains bounded subsidy, cleaner balance sheets, and a politically defensible reform path. Aquifers get a chance to recover.
India has already spent too many years subsidising uncertainty. It is time to subsidise reliability instead. India’s distribution reform will begin in earnest the day reliability becomes more politically rewarding than subsidy.
Ashish Kumar Singh is a Distinguished Fellow at the Observer Research Foundation.
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Ashish Kumar Singh is a Former Additional Chief Secretary, Transport & Ports, Government of Maharashtra; Distinguished Fellow, Observer Research Foundation ...
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