Surya Ghar Muft Bijli Yojana
Context:
Recently, the Prime Minister announced the Surya Ghar Muft Bijli Yojana.
Relevance:
GS-02 (Government policies and interventions)
Surya Ghar Muft Bijli Yojana:
- It is a rooftop solar scheme for free electricity.
- The scheme aims to light up 1 crore households by providing up to 300 units of free electricity every month.
- The central government aims to give substantive subsidies, which will be given directly to people’s bank accounts, and heavily concessional bank loans to reduce the cost burden on people.
- Stakeholders from all sectors will be integrated into a National Online Portal.
- Urban Local Bodies and Panchayats shall be incentivised to promote rooftop solar systems in their jurisdictions just so penetration occurs at the grassroot levels.
- The scheme is expected to generate more income, lower power bills and provide employment for people.
Subsidies:
About:
- A subsidy or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy.
Cost of Subsidies:
- Subsidies are financed by taxpayer money.
- These are the funds that could otherwise be allocated to developmental projects such as infrastructure, transportation, and energy.
- Increased spending on subsidies leads to higher taxes, reduced government spending on developmental projects.
- It sometimes can be inflationary due to excessive currency printing.
Impact on Economy:
- It reduces people’s purchasing power as it increases taxes.
- It also leads to decreased consumer spending and overall demand in the country, which in turn affects GDP growth rates.
- Reduced government spending results in lower efficiency and productivity within the economy that further impacts GDP growth negatively.
Acceptance of Subsidies:
- Despite the negative effects, voters often accept governments that offer subsidies as the immediate damage is not always visible, akin to the situation of a child of disturbed parents exhibiting behavioral issues.
- Subsidies should ideally benefit the needy.
- Subsidizing essential commodities like diesel, kerosene, and LPG for the poor while ensuring those who can afford it pay market prices is advisable.
Other related Initiatives:
- National Solar Mission
- Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
- SRISTI Scheme
- Solar Park Scheme
- Rooftop Solar Scheme
- International Solar Alliance
