PM KUSUM Explained – Components, Benefits, Budget

March 28, 2020
SEBI Grade A Test Series

PM KUSUM (Kisan Urja Suraksha evam Utthaan Mahabhiyan ) has been launched by government with the objective of providing financial and water security to farmers. The scheme aims to add solar and other renewable capacity of 25,750 MW by 2022 with total central financial support of Rs. 34,422 Crores.

PM KUSUM

Components of PM KUSUM

The PM KUSUM Scheme consists of three components:

  • Component A: 10,000 MW of Decentralized Ground Mounted Grid Connected Renewable Power Plants of individual plant size up to 2 MW. The plant can be set up by will be setup by individual farmers/ cooperatives/panchayats /farmer producer organisations (FPO) on their barren or cultivable land. DISCOM would be eligible to get Performance Based Incentive @ Rs. 0.40 per unit purchased for a period of five years
  • Component B: Installation of 17.50 lakh standalone Solar Powered Agriculture Pumps of individual pump capacity up to 7.5 HP. The central government will provide Central Financial Assistance (CFA) of 30% (50% to North East and Hill States), the State Government will give a subsidy of 30%; and the remaining 40% (20% in case of North East and Hill States) will be provided by the farmer. Bank finance may be made available for farmer’s contribution, so that farmer has to initially pay only 10% of the cost and remaining up to 30% (10% in case of North East and Hill States) of the cost as loan.
  • Component C: Solarisation of 10 Lakh Grid-connected Agriculture Pumps of individual pump capacity up to 7.5 HP. The farmer will be able to use the generated solar power to meet the irrigation needs and the excess solar power will be sold to DISCOMs. The central government will provide Central Financial Assistance (CFA) of 30% (50% to North East and Hill States), the State Government will give a subsidy of 30%; and the remaining 40% (20% in case of North East and Hill States) will be provided by the farmer. Bank finance may be made available for farmer’s contribution, so that farmer has to initially pay only 10% of the cost and remaining up to 30% (10% in case of North East and Hill States) of the cost as loan.

Components A and C of the Scheme will be implemented in Pilot mode till 31st December 2019. Component-B will be implemented in full-fledged manner.

Benefits of PM KUSUM

  • The Scheme will have substantial environmental impact in terms of savings of CO2 emissions
  • It is likely to result in saving of about 27 million tonnes of CO2 emission per annum
  • Standalone solar pumps may result in saving of 1.2 billion liters of diesel per annum and associated savings in the foreign exchange due to reduction of import of crude oil.
  • To generate employment opportunity equivalent to 6.31 lakh job years for skilled and unskilled workers
  • To provide a stable, continuous and long-term source of income to rural landowners

Implementing Agency of PM KUSUM

The Ministry of New and Renewable Energy is implementing the PM KUSUM Yojana.

PM KUSUM Budget 2020-21

  • 20 lakh farmers to be provided for setting up stand-alone solar pumps.
  • Another 15 lakh farmers to be helped to solarise their grid-connected pump sets
  • The scheme will allow farmers to set up grid-connected solar power generation capacity on fallow and barren land

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