What Happened
- Analysis of PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) points to its central structural weakness: implementation is heavily dependent on state government procurement, DISCOM (electricity distribution company) payments, and administrative capacity — creating uneven adoption and delays.
- As the government prepares PM-KUSUM 2.0, experts argue that a shift to demand-led adoption — where farmer demand directly drives installations rather than state procurement targets — is essential for the scheme to succeed at scale and become sustainable.
- Component B (standalone solar pumps for off-grid farmers) has outperformed Component A in uptake, suggesting farmer demand exists where electricity supply is unreliable; however, delayed DISCOM payments and state budget constraints continue to suppress the scheme's potential.
- In FY25, Component B saw 4.4 lakh solar pump installations (a 4.2-fold increase over the previous year) and Component C solarised 2.6 lakh pumps (25 times more than in FY24), indicating accelerating momentum — but from a low base relative to targets.
- The broader question raised is whether PM-KUSUM 2.0 should be restructured to work through market-based models (farmer financing, equipment loans, leasing) rather than subsidy-driven state procurement.
Static Topic Bridges
PM-KUSUM Scheme: Architecture and Components
PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) is the flagship central scheme for solarising India's agricultural sector, launched in 2019 by the Ministry of New and Renewable Energy (MNRE) with the dual objective of providing assured income to farmers and reducing agricultural power subsidies to DISCOMs.
- Component A: Installation of 10,000 MW of decentralised ground/stilt-mounted grid-connected solar or renewable energy power plants of 500 kW to 2 MW capacity, set up by individual farmers, cooperatives, Panchayats, FPOs, or Water User Associations on barren or cultivable land.
- Component B: Installation of 14 lakh standalone solar agricultural pumps for off-grid farmers in areas without grid connectivity.
- Component C: Solarisation of 35 lakh grid-connected agricultural pumps, including feeder-level solarisation where a common solar plant supplies power to all pumps on an agricultural feeder.
- Overall target: add 34,800 MW of solar capacity by March 2026 with Central Financial Assistance of ₹34,422 crore.
- The scheme's dual promise is: energy security for farmers (reduced diesel costs, assured power) + new income stream (selling surplus solar power to DISCOMs at guaranteed rates).
Connection to this news: The analysis argues that despite PM-KUSUM's ambitious design, its dependence on DISCOM cooperation and state procurement has been the Achilles' heel — PM-KUSUM 2.0 must redesign implementation to reduce this dependence.
India's Agricultural Energy Problem: DISCOMs and Farm Power Subsidies
The relationship between India's agricultural sector and electricity distribution companies (DISCOMs) is one of the most complex and financially distressed in the country's energy sector.
- India's DISCOMs provide subsidised or free electricity to farmers in most states — a politically sensitive practice that is embedded in state election cycles and agricultural support frameworks.
- As of recent assessments, DISCOMs collectively carry losses of approximately ₹6–7 lakh crore, partly driven by the gap between the cost of agricultural power supply (typically ₹7–10/unit) and the effective realisation from farmers (often ₹0–2/unit after subsidies).
- Agricultural pump sets consume approximately 18–20% of India's total electricity, but contribute far less in revenue due to subsidies — creating a structural financial drain on DISCOMs.
- PM-KUSUM is partly a DISCOM relief strategy: solarising pumps reduces the energy DISCOMs must supply to farmers at subsidised rates, potentially improving DISCOM finances.
- Delayed DISCOM payments to PM-KUSUM project developers (under Component C) are a major implementation bottleneck, deterring private investment in feeder solarisation.
Connection to this news: The over-dependence on state procurement flagged in the PM-KUSUM analysis is inseparable from DISCOM financial health — states where DISCOMs are most financially stressed are also those where PM-KUSUM implementation has been most uneven.
India's Renewable Energy Targets and Agricultural Solarisation
India has committed to ambitious renewable energy targets under its Nationally Determined Contributions (NDCs) to the Paris Agreement and domestic policy frameworks, with agricultural solarisation playing a key role.
- India's updated NDC (submitted 2022) targets 50% of cumulative electricity installed capacity from non-fossil fuel sources by 2030.
- India's total installed renewable energy capacity crossed 200 GW in 2024; the overall renewable target is 500 GW by 2030.
- Agricultural solarisation under PM-KUSUM is both a renewable energy deployment pathway and a rural economy intervention — converting farmers from consumers of subsidised grid power into producers of clean energy.
- Solar pump adoption reduces India's dependence on diesel pump sets (approximately 9 million diesel pumps were estimated to be in use in Indian agriculture), each contributing to rural diesel consumption and carbon emissions.
- India's International Solar Alliance (ISA), launched jointly with France at COP21 in 2015 and headquartered in Gurugram, promotes solar deployment globally with particular focus on developing countries.
Connection to this news: PM-KUSUM is one of India's key instruments for meeting its renewable energy targets in the agricultural sector; the call for structural reform in PM-KUSUM 2.0 is also a call to ensure India's rural energy transition keeps pace with the 500 GW target.
Demand-Driven vs. Supply-Driven Public Programmes
The debate over PM-KUSUM's implementation model reflects a broader tension in Indian public programme design: whether welfare and infrastructure schemes should be supply-driven (government decides targets and procures) or demand-driven (beneficiaries apply, government funds on a first-come basis).
- MGNREGA is a demand-driven programme: any rural household can demand work, and the government is legally bound to provide it; there is no pre-set state procurement target for a fixed quantity of work.
- In contrast, schemes like PM-KUSUM and PM Awas Yojana are supply-driven at the state level: the Centre allocates targets to states, states procure from vendors, and beneficiaries are selected by the state — creating bureaucratic bottlenecks.
- Demand-driven programmes tend to be more responsive to actual need but can create unpredictable fiscal demands; supply-driven programmes are easier to budget but risk low utilisation if state capacity is weak.
- Hybrid models (like Direct Benefit Transfers for LPG) attempt to combine budgetary predictability with beneficiary choice.
- For PM-KUSUM 2.0, the demand-led approach proposed would mean farmers can directly apply for and access solar pump financing/subsidies through a market mechanism, rather than waiting for state procurement cycles.
Connection to this news: The core reform argument is that making PM-KUSUM demand-led — following the farmer, not the state procurement cycle — would bypass the bottlenecks created by DISCOM delays and state administrative capacity constraints.
Key Facts & Data
- PM-KUSUM launched: 2019, Ministry of New and Renewable Energy
- Component A target: 10,000 MW decentralised solar plants
- Component B target: 14 lakh standalone solar pumps
- Component C target: 35 lakh grid-connected pump solarisations
- Overall solar capacity target: 34,800 MW by March 2026
- Central Financial Assistance: ₹34,422 crore
- Component B installations (FY25): 4.4 lakh pumps (4.2x growth YoY)
- Component C solarisations (FY25): 2.6 lakh pumps (25x growth over FY24)
- DISCOM aggregate losses: ~₹6–7 lakh crore (accumulated)
- Diesel pump sets in Indian agriculture: ~9 million estimated
- India's 2030 renewable energy target: 500 GW installed capacity
- International Solar Alliance (ISA): launched 2015 at COP21, HQ Gurugram