MNRE blames banks for slow progress of solar agri pumps adoption

The Ministry of New and Renewable Energy has blamed banks’ insistence for collateral security for the poor adoption of solar water pumps in the country.

India has about 20 million agricultural pumps that work on electricity (supplied free) and another 7 million that run on diesel. The government of India aspires to convert these to solar-powered pumps, but in the last three years only about 40,000 solar agri pumps have been installed. Again, most of these have come up under the various state government sponsored subsidy programmes.

To give a fillip to the programme, the MNRE came up in 2011 with a ‘credit-linked capital subsidy’ scheme, under which a farmer would come up with 20 per cent of the cost of the pump upfront and banks would lend the rest. However, once the farmer pays back half the loan, his liability ends as the subsidy element kicks-in, which is paid to the banks by Ministry through the government-owned National Bank for Agricultural and Rural Development (NABARD). Read More…