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Tags Current Affairs

Cabinet approves KUSUM scheme

Date: 20 February 2019 Tags: Agriculture, Environment

Cabinet Committee on Economic Affairs (CCEA) has approved launch of Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme to provide financial and water security to farmers through harnessing solar energy. The scheme aims at adding solar capacities of 25.75 gigawatts (GW) by 2022.

Three Components of scheme

Component-A: 10,000 MW of Decentralised Ground Mounted Grid Connected Renewable Power Plants

  • Under it, decentralised renewable power plants of capacity 500 KW to 2 MW will be setup by individual farmers, panchayats, cooperatives or farmer producer organisations (FPO) on their lands.
  • The power generated by these localised plants will be purchased by DISCOMs in tariffs determined by respective State Electricity Regulatory Commissions (SERC).
  • DISCOMs will be provided with Performance Based Incentives of Rs. 0.40 per unit for 5 years for buying power from these localized plants. This will open a continuous source of income to rural land owners.

Component-B: Installation of 17.50 lakh standalone Solar Powered Agriculture Pumps

  • Under it, individual farmers will be supported to install standalone solar pumps of capacity up to 7.5 HP. In this case, Solar PV capacity in kW equal to pump capacity in Horsepower (HP) will be allowed.

Component-C: Solarisation of 10 Lakh Grid-connected Solar Powered Agriculture Pumps

  • Under it, individual farmers will be supported to solarise water pumps of capacity up to 7.5 HP. In this case, solar PV capacity up to two times of pump capacity in kW will be allowed.
  • It will help farmer to use generated energy to meet irrigation needs and sell excess available energy to DISCOM. This will help to create avenues for extra income to farmers, thus help in doubling farmers income.


Component-A and Component-C of this scheme will be implemented on pilot mode. Component-B will be implemented in full-fledged manner.

Funding of Component-B and Component-C: Central financial assistance (CFA) of 30% of benchmark cost or tender cost (whichever is lower) will be provided.  State Government will provide subsidy of 30% and farmers will provide remaining 40%. Besides, bank finance may be made available for meeting 30% of farmers cost. In this case, remaining 10% will be provided by the farmer.  There will be higher CFA of 50% for North Eastern States, Sikkim, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Lakshadweep and Andaman & Nicobar Islands.

Significance of KUSUM Scheme

  • It will have substantial environmental impact in terms of reducing CO2 emissions. All its three components will save about 27 million tonnes of CO2 emission per annum.
  • Its Component-B will result in saving of 1.2 billion liters of diesel per annum and associated savings in foreign exchange due to reduction of import of crude oil.
  • It will also have direct employment potential and also increase avenues of self-employment. Overall it will generate employment opportunity equivalent to 6.31 lakh job years for skilled and unskilled workers.
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