Paani Bachao, Paise Kamao scheme by Punjab government

The Paani Bachao, Paise Kamao (PBPK) scheme is a flagship initiative of the Government of Punjab aimed at promoting water conservation and energy efficiency in the state’s agriculture sector. The scheme, which translates to “Save Water, Earn Money”, is designed to encourage farmers to use groundwater judiciously by linking efficient electricity use with direct financial incentives. It represents an innovative shift from the traditional system of free power supply to farmers towards a performance-based model promoting sustainable resource use.

Background and Need for the Scheme

Punjab’s agrarian economy, though highly productive, faces a severe groundwater depletion crisis due to excessive extraction for irrigation. The widespread use of free electricity for tube wells, introduced in the late 1990s, unintentionally led to over-extraction of water and inefficient energy use. According to studies, more than 80% of Punjab’s groundwater blocks are in the “overexploited” category, threatening the long-term sustainability of agriculture.
Recognising the urgent need for intervention, the Punjab Government, in collaboration with the Punjab State Power Corporation Limited (PSPCL) and the World Bank’s Water Resources Department, launched the Paani Bachao, Paise Kamao pilot scheme in June 2018. The scheme sought to reform energy use in agriculture while maintaining farmers’ economic interests through financial rewards for saving power and water.

Objectives of the Scheme

The core objectives of the PBPK scheme include:

• Promoting water conservation by incentivising reduced electricity and groundwater usage.
• Encouraging efficient irrigation practices, such as the use of drip and sprinkler systems.
• Reforming the power subsidy model to align with sustainable agricultural practices.
• Ensuring equitable water use by discouraging excessive pumping in overexploited regions.
• Enhancing farmers’ income through direct monetary benefits linked to energy savings.

Implementation and Operational Framework

The scheme was launched as a pilot project in select agricultural divisions, initially covering Dhuri (Sangrur), Malerkotla, and Fatehgarh Sahib. It operates through a voluntary participation model and involves close coordination between farmers, PSPCL, and local agricultural officers.
Key operational features include:

• Baseline Allocation: Each participating farmer is assigned a monthly electricity quota based on the previous average consumption required for irrigation.
• Monetary Incentive: Farmers who consume less electricity than their allotted quota receive direct cash incentives for every unit saved.
• Smart Metering: Smart energy meters are installed on tube wells to accurately record consumption and compare it with the baseline allocation.
• Direct Benefit Transfer (DBT): The monetary savings are transferred directly to the farmer’s bank account, ensuring transparency and accountability.
• No Financial Burden: Farmers continue to receive free power up to the approved quota; only the savings translate into additional income.

Financial Model

The scheme follows a revenue-sharing approach. The total cost of electricity that farmers save is shared between PSPCL (which benefits from reduced load and power purchase costs) and the farmer (who earns a share as an incentive).
For example, if a farmer saves 100 units of electricity, the cost of those units—calculated at the average rate of power subsidy—is partially paid to the farmer. The payment rate is pre-determined and communicated at the time of enrolment.
This model ensures that both the government and the farmers benefit mutually:

• The government reduces its power subsidy burden.
• Farmers earn monetary rewards while conserving natural resources.

Technology and Monitoring

The PBPK scheme relies on smart energy meters, remote monitoring, and data analytics. Real-time data collection allows authorities to:

• Monitor individual consumption patterns.
• Identify high- and low-consumption zones.
• Verify savings for payment processing.
• Generate reports for policy refinement and performance evaluation.

Farmers can also view their energy use data and incentive earnings through an online portal managed by PSPCL.

Outcomes and Impact

The pilot implementation produced encouraging results in its early phases:

• Water and Power Savings: Participating farmers demonstrated a reduction of up to 20% in power consumption, correlating with lower groundwater extraction.
• Farmer Participation: Hundreds of farmers voluntarily joined the programme, motivated by both environmental awareness and financial rewards.
• Behavioural Change: The scheme created a new culture of resource accountability, where electricity use became directly linked with economic benefit.
• Reduction in Subsidy Expenditure: PSPCL recorded savings in its operational costs due to reduced load on the rural electricity network.

Based on the success of the pilot phase, the government announced plans to expand the scheme to additional districts, focusing on overexploited groundwater regions.

Challenges and Limitations

Despite its promise, the PBPK scheme has faced several challenges:

• Limited Awareness: Many farmers initially lacked awareness of how the incentive mechanism worked.
• Technical Barriers: Installation and maintenance of smart meters in rural areas posed logistical difficulties.
• Behavioural Resistance: Some farmers were hesitant to shift from the traditional model of free, unlimited electricity.
• Data Reliability: Dependence on technology requires consistent power supply and communication infrastructure for data transmission.
• Scale of Implementation: Expanding the programme statewide demands substantial financial and technical resources.

Complementary Measures

The PBPK scheme complements other government initiatives aimed at sustainable agriculture, including:

• Promotion of Crop Diversification: Encouraging farmers to shift from water-intensive paddy cultivation to maize, pulses, and vegetables.
• Subsidy on Drip and Sprinkler Systems: Offering financial support for micro-irrigation technologies.
• Awareness Campaigns: Conducted jointly by PSPCL and the Department of Agriculture to promote water-efficient practices.

Future Prospects

The Punjab Government envisions expanding the Paani Bachao, Paise Kamao scheme to cover all agricultural feeders equipped with smart metering. The long-term strategy involves:

• Integrating the scheme with real-time water table monitoring systems.
• Introducing progressive incentives for sustained water-saving behaviour.
• Linking PBPK performance with crop insurance and environmental grants.
• Collaborating with research institutions to optimise the model for large-scale replication.

Significance

The PBPK scheme marks a transformative step in Punjab’s agricultural policy. It replaces the conventional subsidy-based approach with a conservation-linked incentive model, making it one of the first such initiatives in India. By rewarding responsible water and energy use, it aligns economic incentives with environmental sustainability.