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Political Economy of Electricity Subsidy: Evidence from Punjab

Author

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  • Jain, Varinder

Abstract

The electricity subsidy distribution pattern needs to be scrutinised to assess whether the policy benefits small producers, a normative argument often made while granting any input subsidy. In Punjab, this policy is found to ignore equity considerations while granting non-discriminatory electricity subsidies to the agricultural sector. This study highlights the existence of disparities in the flow of electricity subsidy between the advanced and backward regions. While the medium and large farmers reap the major benefits of the subsidy, the poor small farmers, especially in the backward areas, remain excluded due to their non-possession of electricity connections. In a nutshell, this paper questions the justification for introducing such a policy and puts forward the case for user charges based on open access to electricity.

Suggested Citation

  • Jain, Varinder, 2006. "Political Economy of Electricity Subsidy: Evidence from Punjab," MPRA Paper 240, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:240
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    File URL: https://mpra.ub.uni-muenchen.de/240/1/MPRA_paper_240.pdf
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    References listed on IDEAS

    as
    1. Ellis,Frank, 1992. "Agricultural Policies in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521395847, March.
    2. Martin J. Osborne & Al Slivinski, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 65-96.
    3. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
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    Cited by:

    1. Rehman, I.H. & Kar, Abhishek & Banerjee, Manjushree & Kumar, Preeth & Shardul, Martand & Mohanty, Jeevan & Hossain, Ijaz, 2012. "Understanding the political economy and key drivers of energy access in addressing national energy access priorities and policies," Energy Policy, Elsevier, vol. 47(S1), pages 27-37.

    More about this item

    Keywords

    Political economy; Electricity Subsidy; Agriculture;

    JEL classification:

    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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