The Punjab Government will soon abolish the water cess levied on drawing out water from canals. This cess was levied on farmers by the Akali-BJP government in 2014 when it had replaced the ‘abiana’ (irrigation charge).
Chief Minister Bhagwant Singh, who had been pushing for the maximum utilisation of canal water for irrigation, has directed the Water Resources Department to draft a proposal for waiving this water cess.
A few days back, Mann had hinted that his government would waive the cess so as to encourage greater use of canal water for irrigation and reduce the drawing out of underground water.
The move is part of Mann’s continuing focus on stemming the desertification of Punjab as the aquifers’ capacity gets reduced. In the first phase of the plan, the government focused on restoring watercourses and distributaries. The second phase aims to ensure that canal water reaches farms at the tail-end of villages. This waiver of water cess will incentivise farmers to shift from tube-well irrigation to canal-based irrigation.
During a recent review meeting, Chief Minister Mann noted that while the government provides substantial power subsidy for groundwater extraction, farmers are still required to pay a water cess for canal irrigation. He suggested that removing the charge could further encourage the use of canal water. The Water Resources Department has already submitted relevant details to the government.
Official records show that over the past four years, the government was expected to collect Rs 360 crore in water cess from farmers. However, the actual collections amounted to only Rs 3.75 crore, which is just 1.04 per cent of the revenue target. Officials acknowledge that the cess has generated negligible revenue for the state treasury.
The water cess was introduced in 2014 after amendments were made to the Indian Canal and Drainage Act, 1873. Under that policy, farmers were to be charged Rs 50 per acre per crop for the use of canal water as cess. The revenue was intended to fund the maintenance, repair and modernisation of canals, distributaries and minor irrigation channels through committees led by executive engineers. At that time, it was estimated that the state would collect Rs 100 crore per annum as water cess.
Before the introduction of the water cess, farmers paid an irrigation charge known as ‘abiana’ for canal water at Rs 150 per acre. In January 2010, the Punjab Cabinet decided not to recover outstanding ‘abiana’ dues from previous years. When farmers later stopped paying the water cess, the government attempted stricter enforcement in 2015 by closing irrigation outlets to defaulters. However, the decision had to be withdrawn following protests by farmers’ organisations.
Punjab continues to provide free electricity for agricultural tube-wells. According to official estimates, each farm electricity connection receives an average annual subsidy of about Rs 55,000. The state currently has around 13.91 lakh tube-wells, and the subsidy burden continues to rise every year.
