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Govt Must Rework Solar Pumps’ Pricing under PM-KUSUM: Shakti Pumps CMD

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growatt01-08-2022

The government needs to rework the pricing policy of solar-powered irrigation pumps for wider implementation of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), Shakti Pumps Chairman and Managing Director Dinesh Patidar said on Wednesday.

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The solution to this problem is to either bid at commercial rate or give a specific quantity for Micro, Small & Medium Enterprises (MSMEs), he added.

Under the PM-KUSUM scheme, launched in February 2019, both Centre and states provide subsidies to farmers for installation of solar water pumps of five horsepower (HP). It is being implemented through tendering in phases.

Speaking to PTI, Patidar said, “there has been a positive response for the scheme. However, a big player like Shakti Pumps is not able to expand to remote states due to the pricing method.” Currently under the scheme, farmers choose from a list of 10-15 companies selected through tendering for distribution of solar irrigation pumps. Both private firms and MSMEs are allowed to participate. It is not necessary that some of the participating firms/MSMEs are real manufacturers.

“There is a huge difference in rates of pumps tendered by MSMEs and big companies like us. We have to match with them and this reduces the margin, thereby limiting expansion to far way states,” he said.

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Due to this reason, many private companies are reluctant to participate. The issue has been flagged to the government already, he said.

Under the PM-KUSUM scheme, launched in February 2019, both Centre and states provide subsidies to farmers for installation of solar water pumps of five horsepower (HP). It is being implemented through tendering in phases.

Speaking to PTI, Patidar said, “there has been a positive response for the scheme. However, a big player like Shakti Pumps is not able to expand to remote states due to the pricing method.” Currently under the scheme, farmers choose from a list of 10-15 companies selected through tendering for distribution of solar irrigation pumps. Both private firms and MSMEs are allowed to participate. It is not necessary that some of the participating firms/MSMEs are real manufacturers.

“There is a huge difference in rates of pumps tendered by MSMEs and big companies like us. We have to match with them and this reduces the margin, thereby limiting expansion to far way states,” he said.

Due to this reason, many private companies are reluctant to participate. The issue has been flagged to the government already, he said.

“MSMEs work for 1-2 per cent coverage. When we match with their pricing, then we don’t have profits. Therefore our focus is implementing in nearby states,” he said and suggested that the solution to this problem is to give quantity to MSMEs or bid for commercial rates.

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Currently, the company is implementing the PM-KUSUM scheme in Maharashtra, Madhya Pradesh, Rajasthan, Haryana, Punjab and Chhattisgarh.

Asserting that the demand for solar water pumps is rising, Patidar said, the company distributed 30,000 solar water pumps during the 2021-22 fiscal under the PM-KUSUM scheme.

A target of 75,000 has been kept for the 2022-23 fiscal, out of which 10,000 pumps have already been distributed under the scheme, he said.

Patidar said solar-powered irrigation pumps are viable compared to non-solar pumps.

He said a 5 HP solar-powered irrigation pump costs about Rs 2.5 lakh at present, which otherwise used to be as high as Rs 7 lakh few years back. And farmers get 25 per cent government subsidy under the PM-KUSUM scheme.

On the other hand, a diesel pump costs about Rs 35,000, but farmers would have to shell out Rs 1,000 per day for diesel expenses. And the total expense turns out to be Rs 2.35 lakh to operate a pump for 200 days in a crop season, he said.

Same is with electric pumps which cost about Rs 35,000, but there is no assured supply of electricity to operate these pumps.

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To get an electricity connection, farmers have to shell out about Rs 50,000 and other costs and service charges make it equally expensive, he added.

“Given this situation, the demand for solar-powered water pumps would only increase in future. It is viable for farmers to install even if the government subsidy is not provided,” Patidar said.

Patidar said Shakti Pumps is likely to post 15-20 per cent revenue growth in the current fiscal from Rs 930 crore achieved in the previous 2020-21 fiscal.

Shakti Pumps, founded in 1982, is a manufacturer of 100 per cent stainless steel pumps. Besides stainless steel pumps, it sells energy saving motors, solar energy pumping solutions, industrial and household pumps.

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