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PM Modi’s solar pumps scheme for farmers triggers job losses among EPC contractors

Vikas Srivastava
The scheme has a target to install 17.50 lakh solar pumps in Indian farms by 2022. (Representational image)

The Pradhan Mantri Kisan Urja Suraksha Evam Utthan Mahaabhiyan (PM-KUSUM) scheme, launched in July this year to encourage farmers to use solar electricity pumps instead of high-emitting diesel pumps, has reportedly led to large-scale job losses among the EPC contractors of agriculture solar pumps.

The scheme has a target to install 17.50 lakh solar pumps in Indian farms by 2022.

Under the scheme participation of the contractors -system integrators - has been barred and only manufacturers of solar pumps and panels are eligible to bid for the tenders. Around 800 system integrators in India who have installed more than 2 lakh solar pumps till now across the country have been left high and dry, according to sources.

The impact has been severe on players who were forced to lay off their employees and cut their total strength to less than half, even as many of them continue to work with the bare minimum strength ever since the launch of the scheme and the first tender was floated by EESL in August, these sources added.

Gaurav Kumar, co-founder of Claro Energy, one such contractor told FE, "We had to lay off people as there was no visibility for growth. Going ahead we expect the business to only come through maintenance jobs from existing sites."

At present, over 30 million agricultural pumps are installed in India, out of which a third are diesel based.

It is believed over 20 million grid-connected agriculture water pumps installed in the country consume more than 17% of total annual electricity consumption of the country. Solarisation of the same can reduce dependence of these pumps on conventional sources of energy supplied by discoms and reduce the burden of subsidy on agriculture consumption. This will also provide additional source of income to farmers who will be in a position to sell the surplus power to discoms.

Sachin Singh, business head (solar water pump) Mahindra Susten, said, "Most of these bidders (manufacturers) though have higher turnover compared to system integrators, do not have the free cash flow to execute projects. It can only be possible with the support of the system integrators who have the last mile network and technical knowhow."