States Spend ₹2.4 Lakh Cr on Power Subsidies; Solar Push to Cut Bill – MNRE Secy Sarangi

The ₹2.4 lakh crore spent by Indian states each year on electricity subsidy is a growing concern for the Union and state budgets. In an interview with The Hindu , Santosh Kumar Sarangi , Secretary of the Ministry of New and Renewable Energy (MNRE) , highlighted that the Centre’s solar programmes are being designed not only to add clean‑energy capacity but also to persuade states that the subsidy burden can be reduced over time. Key Developments States allocate varying amounts for electricity subsidy , creating a heterogeneous fiscal impact across the country. The push for farm solarisation and rooftop solarisation is expected to curtail the subsidy outgo. The Centre is linking renewable‑energy incentives to the reduction of state‑level electricity subsidies, signalling a policy shift from pure capacity addition to fiscal rationalisation. Important Facts Annual electricity subsidy bill: ₹2.4 lakh crore . States’ subsidy amounts differ, reflecting diverse consumption patterns and tariff structures. Solar capacity targets under the national mission remain unchanged, but the emphasis on solar programmes now includes subsidy‑reduction objectives. Relevance for UPSC Understanding the fiscal implications of electricity subsidies is crucial for GS‑3 (Economy) as it touches on public finance, fiscal deficit, and the sustainability of subsidy schemes. The shift towards farm solarisation and rooftop solarisation illustrates how renewable‑energy policy can be leveraged to address fiscal challenges, a theme that recurs in questions on energy security and climate policy. Way Forward Accelerate deployment of farm solarisation projects, especially in water‑intensive states, to replace grid‑based irrigation power. Promote large‑scale rooftop solarisation through attractive net‑metering and subsidy‑linked incentives. Encourage states to adopt a phased reduction of electricity subsidy by tying fiscal transfers to renewable‑energy adoption metrics. Monitor the impact of subsidy reduction on agricultural productivity and rural electrification to ensure inclusive growth.