Society
Why Kerala Has Struggled to Replicate Perinjanam’s Solar Success
In Perinjanam, a small coastal village in Kerala, rooftop solar panels have transformed hundreds of households—slashing electricity bills and proving the potential of community-driven energy. Yet across Kerala, India’s most literate state, similar projects remain rare, revealing the gap between local innovation and statewide adoption. Here is how it can happen.
On a humid afternoon in Perinjanam, a coastal panchayat in Thrissur district of the South Indian state Kerala, Susheela leads me into her kitchen and points upstairs to the metal roof. The small array of solar panels there has changed the family’s daily expenses. “Before 2016, our electricity bill was over Rs 1,000 every month. After that, it rarely crosses Rs 200,” she says, folding her hands as if to show how the burden has lifted. “Installing solar panels on the roof has been undoubtedly beneficial. We’ve seen clear savings on our bills,” Susheela says.
Perinjanorjam (Perinjanam Energy), the village’s community-driven rooftop solar initiative, now powers more than a thousand households like Susheela’s and has drawn attention across India. In 2016, the panchayat embarked on what was then an audacious experiment—combining government subsidies, cooperative-bank lending, and local mobilization to make an energy self-reliant village. The results were undeniable on the ground. But the very success that made Perinjanam a poster child has not translated into a replicable model across Kerala. Nine years since its launch, and three years after high-profile endorsements and study visits, other panchayats still hesitate. Why?
The Perinjanam solar project, driven by the collective efforts of local institutions and residents, is celebrated as a model for other panchayats. For a state like Kerala, which relies heavily on electricity from outside, rooftop solar projects are crucial. By involving ordinary families, they demonstrate the strength of a decentralized approach—while also advancing India’s clean energy transition.
At COP26, India pledged 500 GW of renewable capacity by 2030. Progress has been steady, with 235.7 GW already in place, but the pace must increase. Decentralized, community-driven initiatives like Perinjanam could help bridge the gap.
What is the Perinjanam Project?
It’s an alternative electricity generation and distribution model, with participation from the public, panchayat, cooperative bank, Kerala State Electricity Board (KSEB), and Solar Energy Corporation of India (SECI), carried out in Perinjanam gram panchayat, Thrissur. Perinjanam, the first panchayat in India to generate 700 kW of rural solar power for itself, is a model for local energy self-sufficiency. Daytime electricity from the solar panels is used for household needs; the surplus is supplied to KSEB’s common pool grid. At night, homes rely on KSEB power. Electricity bills reflect the difference between what is exported and what is imported. If the exported and imported electricity quantities are equal, the only charge is meter rent. The heart of Perinjanam project is a consumer committee set up for project implementation.
Launched in 2016 by then-panchayat president Sachith KK with the support of then Kerala State Electricity Regulatory Commission (KSERC) chairman TM Manoharan, Perinjanam’s solar initiative was born out of their vision, as said by then consumer committee head Noorrudheen to EdPublica. “Sachith learned about SECI’s 500 kW subsidized scheme for solar in Kerala through Manoharan. The idea to use this for local benefit was decisive,” Noorrudheen says.
Through numerous meetings and awareness campaigns, ward members reached out house-to-house to educate people about solar. Since the project started soon after a major solar scam in Kerala, skepticism lingered. The initial plan was for a 500 kW project covering 250 homes, with rooftop units typically ranging from 1 to 5 kW. For Perinjanam residents, many of whom faced financial hardships, participation in the novel project required financial support. Both the panchayat and the cooperative bank (then under CPI(M) leadership) decided after much discussion to give low-interest, collateral-free loans to participants. Noorrudheen credits this bank loan as the key factor that made the Perinjanam project a success. With Manoharan as an advisor, KSEB offered full support. Households with bills above Rs 500 were targeted first. An active, proactive panchayat president engaged the cooperative bank, registered a consumer committee as a one-stop solution for project management, and worked with SECI for subsidies. Thus, Perinjanam stands out as a unique community-driven project involving multiple stakeholders—a model found nowhere else.
According to latest estimates, Perinjanam section’s monthly generation stood at 3.16 MW, now including Kaypamangalam and Mathilakam panchayats. “There are 1008 connections under the Perinjanam section. The project covers 956 houses. The remaining are shops and other institutions. Today the project reached a capacity of 4,305 kW. The total generation is 316,823 units,” says KSEB Assistant Engineer Thara.
The project can produce enough electricity in a year to meet the needs of roughly 4,000–6,000 rural households. Perinjanam has around 5,342 households, according to the last Census report, and a typical rural home in Kerala uses about 97 units per month. That means the plant’s full annual potential—roughly 5.17–6.89 million units—could supply most, if not all, of the panchayat’s households. So far, it has generated 316,823 units, already enough for about a year’s supply to 270 homes, a figure expected to grow as the system completes more annual cycles—enough to power nearly all homes in one or two wards of Perinjanam.
Why Hasn’t Perinjanam Been Replicated?
Apart from achieving energy self-sufficiency through solar power, a 2022 report revealed that the Perinjanam Solar Initiative reduced carbon emissions by 192,000 kilograms. Inspired by Perinjanam’s outcomes, 37 panchayats in Tamil Nadu decided to implement similar projects, and in 2022, a 45-member delegation from Tamil Nadu visited Perinjanam to study the model.
Kerala Chief Minister Pinarayi Vijayan and Finance Minister K N Balagopal had publicly urged other panchayats to adopt the Perinjanam model. However, no other panchayat has followed suit so far. Let us look at the reasons behind this.
One major reason, as often pointed out, is that the Perinjanam Solar Project was not a flagship initiative of the panchayat itself. The panchayat acted only as a facilitator, while it was the consumer committee that took the lead in implementation. The project originated from the idea of the then panchayat president, who pushed it forward, but what truly set it apart was the proactive role of the consumer committee.
The Perinjanam model is in fact the most practical and replicable model for other panchayats. What makes it unique is the structure of its consumer committee, a 14-member registered body that oversees everything—including the maintenance of solar units and overall project management. Earlier, the panchayat president himself was part of the committee. However, with a change in the elected local body, the current panchayat committee appears less interested in the project. The consumer committee members are elected annually by the beneficiaries themselves. “It is this committee system that keeps the initiative alive,” explains Noorrudheen.
Our visit to the panchayat office confirmed this impression: informally, top officials acknowledged that the panchayat functions only as a facilitator. And the response reflects their lack of interest. “For Perinjanam’s success to spread elsewhere, what is needed most is government-level intervention,” says Sachith. He recalls that Finance Minister Balagopal even mentioned Perinjanam in his budget speech, urging local bodies to adopt such initiatives. “But that is not enough,” he argues. Each year, the government issues guidelines listing ten mandatory activities/action plans for local bodies. Unless rooftop solar—implemented with people’s investment, cooperative bank support, and government subsidies—is included in that framework, and unless it becomes part of the annual project plan, real expansion will not happen. “So far, no such directive has come. That is a big reason for the failure,” Sachith adds. “If each of Kerala’s 956 panchayats installed even one megawatt, which alone would add up to 956 MW. People are willing to invest their money; cooperative banks only need to support those who cannot afford the upfront cost. It requires far less effort and expense than building new power projects. But it must be made mandatory to install 1 MW of solar energy in every Panchayat,” he insists.
Another barrier is the lack of awareness. “People do not fully understand what green energy is, nor why shifting to it is important,” says the former panchayat president. “I installed a 4 kW rooftop solar unit at my house. I own an electric scooter and even an electric car. But very few people think about how far we can run an entire household on green energy.”
There is also the issue of local body leadership. Panchayat leaders often fail to think innovatively about the possibilities before them. “We once used CSR funds to power streetlights with rooftop solar. The panchayat, which had an electricity bill of Rs 90,000(approximately $1,015.50) , reduced it by nearly Rs 30,000 ($338.50),” recalls Sachith.
For N K Sathyanathan, who was the president of the local cooperative bank during the project’s rollout, the main barrier to replication elsewhere is lack of financial support mechanisms. “When we began Perinjanam Solar, cooperative banks technically had no provision to offer loans for rooftop solar. But with the support of the then panchayat president and Manoharan from KSEB, we devised a sub-rule to make it possible,” he explains. The bank allocated Rs 1 crore for loans, offering up to Rs 50,000 per individual with minimal collateral—family members could stand as mutual guarantors, without the need for extra security. The loans were offered at low interest and had a 36-month repayment period. Over 300 households received loans in the first phase, and almost all repaid ahead of schedule, without a single default.
Sathyanathan argues that if Kerala’s many cooperative banks adopt a similar loan framework, it could unleash a revolution in rooftop solar. He recalls even Tamil Nadu officials asking him how they managed it, and he shared their model of innovative lending. “When electricity demand rises, states often turn to nuclear or hydro projects. But rooftop solar is a viable alternative. If encouraged, Kerala would never need to depend on buying electricity from other states,” he says. “The government doesn’t lose a single rupee on this model.”
Noorrudheen adds that affordable financing is crucial to expand rooftop solar to low-income households. He also stresses that consumer committees are vital: since these are long-term projects, relying on elected panchayat bodies alone is risky, because changes in leadership after elections can disrupt continuity. Instead, projects should be run by independent consumer committees, supported by the panchayat. Ensuring the availability of technical experts even after the warranty period is another key requirement.
Premlal, convener, consumer committee, thinks that the lack of interest from agencies like KSEB is also a factor. “The Perinjanam project happened due to a confluence of many factors—the vision of the then panchayat leadership, intervention by the KSEB regulatory commission chairman, Manoharan’s initiative, and crucially, cooperative bank financing. Many residents also invested from their own pockets. Unless such elements come together, replication elsewhere will remain difficult.”
“At that time, about 500 people in Perinjanam were aware of solar. It was significant that a 1 kW system could be installed for Rs 45,500 (approximately $664–$684 USD at 2016 exchange rates),” says Sachith. The project was implemented by a 14-member solar consumer committee chaired by the panchayat president, with the panchayat serving as facilitator and eligible houses enrolled. SECI sanctioned a Rs 19,500 subsidy per kW, bringing the actual cost per kW to Rs 65,000; consumers paid only Rs 45,500. The committee handled documentation, SECI coordination, and contracting, freeing consumers from hassles. Contractors were selected through competitive quotations. GPR Power Solutions (Chennai) was contracted for implementation, and the consumer committee continues to manage maintenance. Loans to the tune of Rs 1.3 crore were taken from the cooperative bank for the project.
Lives Transformed
“Rooftop units range from 1 to 5 kW, with the initial target being 500 kW; it’s presumed now to exceed 4,000 kW. Perinjanam’s success inspired others, and the project is a global model—environmentally, too, its benefits are clear. People are very satisfied,” says consumer committee convener Premlal, a fact confirmed by the EdPublica team’s field visit.
Still, people have some anxieties about new regulations. “We installed our solar unit at launch, with Manoharan’s advice. Our bills now are just Rs 130–200. But there are rumors of rule changes, and that worries us,” says Susheela, a Perinjanam homemaker. Recently, bill amounts have increased, which she and others have brought up with the committee. She adds: “We’ve never had any problem with the solar unit. When the panel broke, it was replaced free.” Susheela’s family installed a 2 kW unit via loan; the process was smooth and the amount repaid in two years.
Image by Lakshmi Narayanan/EdPublica
Rahimabi, another resident, notes that bills initially came down to Rs 250 but are now as high as Rs 1,000 again, which concerns her. Bharathan, a Gulf returnee, has a 2 kW unit and says he’s never had a maintenance issue. He worries about a possible rule requiring battery storage for units above 3 kW and says his panel may soon need replacing. His monthly bill, once Rs 900–Rs 1,000, is now just Rs 300, but he laments the low compensation from KSEB and the risk of full supply loss in a power cut.
Prajitha and Sreekanth’s family, among the first solar homes in the panchayat, added battery storage alongside their unit because of concerns about rising bills. “Earlier, my bill was Rs 900. Now, we pay only the meter rent—Rs 140. There have been no maintenance issues so far.”
Premlal also reports quick payback and additional income for higher producers, and Sathyan master, another resident, claims he got back as much as Rs 2,000 after use. One house, for instance, produces 17 units per day, and some households that both produce and consume solar energy (prosumers) have earned up to Rs 9,000 by selling power back to KSEB. At the same time, the reality is that the project has not yet reached everyone in the panchayat. “I have never heard about such a solar initiative,” says Raphael, a mason and resident of Perinjanam. Sukanya, a homemaker from Perinjanam, adds, “I had no awareness of such a project, and when I first heard about it, it seemed like something that would cost a lot of money.”
Image by Lakshmi Narayanan/EdPublica
Why Kerala Needs Rooftop Solar
According to the Ministry of New and Renewable Energy, Kerala currently ranks 13th in the country in terms of installed renewable energy capacity. Across India, nearly 80% of newly added renewable units are solar-based. Government figures show that India has overtaken Japan to become the world’s third-largest solar producer. As of July 2025, the country’s cumulative solar capacity stands at 119.92 GW—of which 19.88 GW comes from grid-connected rooftop systems and 5.09 GW from off-grid installations. Notably, Kerala does not figure among the regions identified by the Centre as high-potential zones for renewable energy.
States like Rajasthan, Gujarat, and Madhya Pradesh have tackled the solar energy challenge by setting up vast solar farms spread across thousands of hectares. Kerala, however, does not have such an option due to its limited land availability. “But there is immense potential for rooftop solar here,” says Sreekanth, an independent researcher in the field.
According to official government reports, Kerala’s installed solar capacity stands at 1,792.34 MW. Of this, the installed rooftop solar capacity is just 24.93 MW. Data released by the Ministry of New and Renewable Energy (MNRE) shows that the state’s total renewable energy capacity is 4,106.78 MW. This means rooftop solar contributes only 1.39% of Kerala’s total solar capacity, and just 0.61% of the overall renewable energy capacity.
Kerala has set ambitious targets: to achieve 100% renewable energy by 2040 and to become a net carbon-neutral state by 2050. The Kerala State Action Plan on Climate Change 2023–2030 (Kerala SAPCC 2.0), released by the Chief Minister, outlines several programmes and strategies designed to help the state reach these goals.
In this journey, rooftop solar projects will have a decisive role to play. Kerala now has 152,000 rooftop units (946.9 MW), a top growth record under the PM Surya Ghar programme—yet only 2 percent of its 13 million energy consumers use rooftop solar. Critics say new policies have raised fresh challenges, even as KSEB imports about 70% of its electricity from outside. Solar remains the best alternative.
Rising Challenges
Noorrudheen points out a growing concern: because of the current approach of the government and KSEB, solar power is becoming a less attractive option for ordinary people.
KSEB, however, argues that there is another side to the issue raised earlier by Bharathan. According to the utility, grid-connected solar units can impose additional costs on consumers. In Kerala, peak electricity demand occurs between 6 p.m. and 11 p.m., whereas households that both produce and consume solar energy (prosumers) use only about 36% of the power they generate. The rest is exported to the grid. But at night, they draw back about 45% of their supplied energy. On average, KSEB purchases only 19% of the solar power generated daily.
This mismatch adds financial pressure: because electricity costs rise during peak hours, KSEB estimates that the power banking arrangement could result in losses of nearly Rs 500 crore in FY 2024–25. This translates into a 19-paise increase per unit of electricity for Kerala’s 13 million consumers.
If rooftop solar systems above 3 kW are installed without battery storage, this burden is expected to rise further in coming years. KSEB projects that by 2034–35, consumers may face an additional 39 paise per unit due to this imbalance. These figures form the basis of the argument for making battery storage mandatory, though such a move poses another serious challenge for scaling up rooftop solar projects. At present, Kerala ranks fourth in India in terms of installed rooftop solar capacity, behind Gujarat, Maharashtra, and Rajasthan.
Regulatory Impacts on Rooftop Solar Adoption
The regulatory framework may further affect adoption. The Kerala State Electricity Regulatory Commission (KSERC) has proposed restricting net metering to systems under 3 kW, down sharply from the earlier 1 MW limit. Larger consumers would instead fall under net billing or gross metering, which are far less favourable.
Financial implications are significant. Under net billing, exported solar power is priced at the Solar Energy Corporation of India (SECI) discovered tariff, often as low as Rs 2–2.5 per kWh, compared to the Rs 3.59 per kWh retail tariff that consumers pay when buying from the grid. This pricing difference reduces savings and extends the payback period of rooftop solar investments. Moreover, households may need to install costly battery storage systems, which are not subsidized and can cost Rs 16,000–18,000 per kWh of capacity.
Market Consequences
Impact on adoption has already become visible. Reports suggest that Kerala’s monthly rooftop solar installation rate has dropped from 15 MW to just 5–6 MW since the draft regulations were introduced. While regulators argue the changes are necessary to ensure grid stability and minimize utility losses, the burden of balancing the grid has effectively been shifted to individual consumers. This risks discouraging both new and existing users from investing in rooftop solar, potentially slowing down Kerala’s progress toward its 2040 renewable energy and 2050 carbon-neutrality goals.
Perinjanam’s New Phase
“As part of the next stage of growth, Perinjanam is set to introduce battery storage as a new model,” says Sachith. A Battery Energy Storage System (BESS) in solar refers to a sophisticated system that stores electrical energy generated from solar panels in advanced rechargeable batteries for later use. This allows energy to be captured during peak solar production, stored when the sun isn’t shining, and then discharged during times of high demand or low solar output. BESS systems improve grid stability by balancing supply and demand, provide backup power during outages, and enhance the integration of intermittent renewable energy sources like solar.
“In our model, the electricity we generate will be stored and then supplied to KSEB during peak hours. At present, we receive just Rs 2.83 per unit, but with this system it could increase to as much as seven rupees,” Sachith explains. He stresses that such storage models must be widely implemented across Kerala. The Perinjanam project is already moving forward with this plan. The first unit will have a 500-kilowatt capacity, with an investment of around Rs 1.5 crore for battery storage. Of this, 10% will be contributed by the consumer committee, while the remaining 90% will come from a mix of 50% subsidy and 40% viability gap funding. The committee has also demanded a 20% profit margin.
With the successful implementation of this initiative, Perinjanam Solar is expected to gain greater recognition and be discussed at a much larger scale…
(This story was produced with support from Internews Earth Journalism Network)
Society
India’s Investment Growth Has Doubled. Is Private Capital Finally Moving?
India’s investment growth is accelerating, with GFCF rising 11.9% in Q1 FY27. But the bigger question is whether this momentum signals a sustained revival in private capital. From factory utilisation and bank credit to manufacturing and employment, the next few quarters will reveal whether India’s public investment push is finally drawing private businesses into a broader investment cycle.
India’s latest GDP numbers offer a reason to look beyond the headline 7.8% growth. Gross fixed capital formation (GFCF), a measure of private investment in fixed assets across the economy, grew 11.9% in the first quarter of 2026-27, compared with 5.8% a year earlier. Its share of nominal GDP also increased to 34.3%, from 31.4% a year earlier.
Other indicators point in the same direction. Capital-goods production grew 15.2% in the quarter, compared with 8.8% a year earlier, while industrial credit expanded 20% year-on-year in July, compared with 6.5% a year earlier.
The numbers suggest that investment activity is gaining momentum. But raising concern is whether India is finally moving from a period of government-led capital spending towards a broader private investment cycle?
From Public Capex to Private Investment
For several years, public capital expenditure has been central to India’s growth strategy. The government has invested heavily in roads, railways, ports, power and other infrastructure, with the broader objective of improving connectivity and lowering the cost of doing business.
The idea was not simply for the government to build more infrastructure. Public investment was also expected to create conditions in which businesses would become more willing to invest in factories, machinery and new capacity. The latest data provide some evidence that this process may be gaining traction.
GFCF grew 11.9% in Q1 FY27, more than twice the 5.8% growth recorded a year earlier. Capital-goods production also accelerated, growing 15.2% in the quarter. In July, capital-goods production increased another 16.1%. Industrial credit provides another signal. Lending to industry grew 20% year-on-year in July, compared with 6.5% a year earlier.
Taken together, these indicators suggest that the investment story is broader than a single GDP component. But they do not, by themselves, prove that India has entered a private investment boom. GFCF measures investment across the economy; it is not the same as private capital expenditure.
Is Private Capital Actually Returning?
This is the more important test. Reuters reported that private-sector capital investment increased by more than 5 trillion rupees from a year earlier during the April-June quarter. It pointed to stronger factory utilisation, healthier corporate balance sheets and rising bank credit as some of the factors supporting the revival.
There is another encouraging signal from the Centre for Monitoring Indian Economy (CMIE). Private companies announced projects worth 15.4 rupees lakh crore during the quarter, a 97% increase from a year earlier. But project announcements are not the same as money actually being spent. Companies can delay, scale down or abandon projects after announcing them.
That distinction matters because private capital expenditure had actually moderated in FY26. A Union Bank of India analysis reported by The Tribune found that private capex fell 2.8% to 11.9 lakh crore rupees in FY26 from 12.3 lakh crore rupees in FY25, after reaching a record level the previous year. The picture, therefore, is not of a private investment boom that has already been established. It is a possible revival that still needs to prove itself.
Why Might Companies be Investing Now?
One possible explanation is that existing industrial capacity is being used more intensively. When factories operate closer to capacity, companies have less room to increase output using existing machinery. That can make investment in new equipment, facilities and production lines more attractive.
Recent Reserve Bank of India assessments indicate that capacity utilisation has moved above its long-term average. Reuters reported that factory utilisation approached 77% in the fourth quarter of FY26. At the same time, corporate balance sheets have strengthened and bank credit has accelerated.
These conditions can reinforce each other. Higher utilisation can encourage investment. New investment can increase production capacity. Stronger demand can then encourage another round of expansion. But this cycle depends on one thing: whether companies believe demand will remain strong enough to justify investing in new capacity.
Where is the Money Going?
The sectoral composition provides another clue. Manufacturing grew 9.2% in Q1 FY27. Within manufacturing, electrical equipment production increased 27%, other transport equipment 19.5%, and computer, electronic and optical products 12.4%. These are among the sectors central to India’s effort to expand domestic manufacturing and build strategic industrial capacity.
Government policy is reinforcing this direction. The Mobile Phone Manufacturing Scheme, approved in July, has an outlay of 62,500 crore rupees through 2030-31. Semicon 2.0 has an allocation of 1.275 lakh crore rupees for areas including chip design, manufacturing, advanced packaging and research. These are government outlays designed in part to catalyse private investment. They should therefore not be treated as private capital expenditure themselves.
The bigger question is whether such support helps create industries that can eventually compete and expand without remaining permanently dependent on government incentives.
The Employment Test
More investment means more factories, machinery and infrastructure. But it does not automatically mean more jobs. The employment impact depends heavily on what is being built. A highly automated semiconductor facility can involve enormous capital expenditure while creating relatively few direct jobs compared with a labour-intensive manufacturing plant.
For India, this distinction matters. A successful investment cycle should ideally do more than increase the value of fixed assets. It should raise production, improve productivity and create employment, particularly in sectors capable of absorbing large numbers of workers.
The current GDP data cannot yet tell us whether that is happening. That makes employment one of the most important tests of the investment revival in the quarters ahead.
The Demand Problem
There is another basic question: who will buy what the new investment produces? Household consumption grew 7.1% in Q1, while exports grew 12%. Both provide some support for companies considering expansion.
But investment decisions depend on expectations about future demand, not just one quarter’s performance. If domestic consumption weakens, businesses may postpone capacity expansion. If global trade becomes more uncertain, export-oriented companies could face the same pressure.
India is therefore attempting to build a private investment cycle while the global economy remains exposed to geopolitical tensions and trade uncertainty. That makes the transition from public investment to private investment more difficult than simply recording one strong quarter.
The Real Test Begins Now
The 11.9% increase in GFCF matters because it is accompanied by several other positive signals. Capital-goods production is rising. Industrial credit has accelerated. Manufacturing is expanding. Private companies are announcing more projects. Corporate capacity utilisation has strengthened.
But one quarter cannot establish a structural investment cycle. The more meaningful test will be whether companies continue to announce and execute new projects over the next several quarters; whether investment spreads beyond a limited group of sectors; and whether higher capital formation translates into greater production and employment.
The investment numbers also need to be read alongside the broader debate over India’s revised GDP methodology. The government has defended the new series, while some economists have raised questions about aspects of the estimates. That debate makes it even more important to look at several independent indicators rather than relying on the GDP figure alone.
For now, the data offer something more useful than a declaration of an investment boom. They suggest that the conditions for a shift from public investment towards stronger private capital formation may be improving. Whether that becomes a durable engine of India’s growth will depend less on what happened in one quarter than on what businesses do next.
Society
Farmers Borrowed to Build ‘Diggis’. Two Years Later, They Are Still Waiting for the Subsidy
Farmers in Rajasthan’s Hanumangarh district built diggis, farm ponds and other water structures after receiving government approval under the Atal Bhujal Yojana. But with crores in subsidies pending, many say they are now left paying loans and waiting for the money they were promised.
Farmers in Rajasthan’s Hanumangarh district built diggis and other water structures after receiving government approval. But with the Atal Bhujal Yojana subsidy still pending, many are left paying loans and waiting for the money they were promised.
Rajaram Bishnoi, a farmer from Chak 4 NTW in Bhagatpura gram panchayat (village council area) of Rajasthan’s Hanumangarh district, applied to the Agriculture Department in 2024-25 under the Atal Bhujal Yojana (Atal Groundwater Scheme) to build a water diggi [a small farm reservoir dug into the ground to store rainwater and canal water for irrigation] with a capacity of 25 lakh litres on his farm. He was in the general category of farmers. The department approved his application. Rajaram then built the diggi on his farm. It cost him around Rs 5 lakh, but he is still waiting for the subsidy from the government.
Rajaram says that the government considers the cost of a diggi to be Rs 4 lakh and gives 75 per cent of this amount as subsidy to farmers in the general category. But the actual cost is higher. He said, “When I built the diggi on my farm, it cost around Rs 5 lakh. I was satisfied thinking that the government would at least give Rs 3 lakh as subsidy. But even after around two years, we have not received the subsidy amount.”
His son, Sushil Kumar Bishnoi, says they borrowed money from a commission agent at an interest rate of Rs 2 per hundred (i.e., 2 per cent, commonly charged per month in informal rural lending) and used it to build the diggi. “We thought that we would soon get the money from the government and repay the loan. But so far, all we have got is the wait. We have to pay the interest every month.”
Atal Bhujal Yojana Subsidy Leaves Rajasthan Farmers Waiting
Rajaram Bishnoi is not the only farmer waiting for the subsidy after building a diggi. Thousands of farmers in Rajasthan built diggis, farm ponds and water structures such as pipelines under the government scheme to save groundwater and increase the availability of water on their farms. They made this investment after getting government approval and in the hope of receiving the subsidy. But now, in Hanumangarh district, subsidy amounting to Rs 38 crore 52 lakh 6 thousand for the work done in two financial years is pending, and farmers have been protesting for a long time to get the money.
According to official figures from Hanumangarh district, farmers built 829 diggis, four farm ponds, purchased six agricultural machines, and laid 10 pipelines in 2024-25. A subsidy of Rs 25 crore 15 lakh 73 thousand is pending for these works. In 2025-26, 410 diggis, 12 farm ponds, 64 agricultural machines, and 40 pipelines were completed, and mini kits [small government-supplied packages of seeds, tools, or inputs] were also distributed. Payments of more than Rs 13.36 crore for these works are pending.
Crucially, many farmers in 2025-26 carried out the construction after getting approval from the government. But after the Atal Bhujal Yojana ended in October 2025, instructions were issued to stop the work. Resham Singh Manuka, district president of the Bharatiya Kisan Union [Indian Farmers’ Union, a national farmers’ advocacy organisation], asks, “When a farmer has invested money on his own land on the basis of government approval and has completed the construction, why is the financial risk of the scheme ending later being passed on to the farmer?”
This question is also important because the central government implemented the Atal Bhujal Yojana from April 1, 2020 to October 15, 2025 in 8,203 water-stressed gram panchayats in 229 blocks of 80 districts across seven states — Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh. It was a pilot scheme for a fixed period. On July 30, 2026, Union Minister of State for Jal Shakti [India’s federal ministry overseeing water resources, river development, and drinking-water supply] Raj Bhushan Choudhary, in a written reply to a question in the Lok Sabha [the lower house of India’s Parliament], said the impact of the scheme was positive. He said that according to the 2023-25 assessment, improvement in groundwater levels was seen in 180 out of 229 blocks.
The government’s own assessment credits the scheme with improving groundwater levels in 180 of the 229 blocks it covered. But whether that technical success reaches farmers depends on the government actually paying what it approved — and in Hanumangarh, that payment is where the scheme is failing.
There is also a long chain of farmers’ protests and government assurances over the payment of the subsidy. On March 6, 2026, after farmers surrounded the office of the Joint Director of Agriculture in Hanumangarh, a written agreement was reached between officials and farmer representatives. It assured that the pending diggi subsidy for 2024-25 would be paid within two months. When the payment did not happen, farmers surrounded the district collectorate and Agriculture Office on May 19. They were then assured that the payment would be made within one month and 15 days. The issue was also raised in the district-level review meeting on June 22. When C.R. Chaudhary, chairman of the State Farmers Commission, visited Hanumangarh on July 30, farmers raised the issue before him.
He told farmers that the subsidy was pending not only for farmers in Hanumangarh but across the state. “I had a courtesy meeting with Union Jal Shakti Minister C.R. Patil in New Delhi and held detailed discussions on important issues related to the interests of farmers in Rajasthan,” Chaudhary said. He said he had written to the Union Minister requesting early payment of the pending subsidy amount for 38 blocks in 17 districts of Rajasthan under the Atal Bhujal Yojana.
Chaudhary told the minister that due to the premature closure of the scheme, liabilities of around Rs 214.86 crore of the Agriculture and Horticulture Department are pending. As a result, thousands of farmers are waiting for their subsidy despite completing their work. The state Agriculture Minister and Chief Secretary have also requested the release of funds in this regard. “I also requested that, keeping the interests of farmers as the top priority, the pending amount should be released soon and the subsidy transferred to the accounts of eligible farmers,” he said.
The chairman of the Farmers Commission had expressed confidence while talking to farmers in Hanumangarh that the Union Minister would take a positive decision on the matter and provide relief to Rajasthan’s farmers soon.
Farmers are getting repeated assurances, but no payment has been made so far. Recently, on August 26, farmers again had to take out a tractor rally. During the rally, the police tried to stop the farmers, but the farmers broke the barricades. This led to a situation of confrontation for some time. The police have registered a case against 11 leaders, including farmer leader Resham Singh Manuka, for allegedly taking out the tractor rally without permission despite the model code of conduct [a set of election-time conduct rules issued by India’s Election Commission that restricts government announcements and gatherings once polls are called] for the municipal elections and prohibitory orders being in place.
Manuka described the police action as an attempt to suppress the farmers’ protest. He said the farmers’ agitation would continue and that the issue would also be raised during the upcoming municipal and Panchayati Raj [elections to India’s local self-government bodies at the village, block, and district levels] elections. He said the farmers’ union would urge people to consider the pending subsidy issue while deciding how to vote. “We will also raise our voice against the government in the Panchayati Raj elections that will follow.”
Farmer Sushil Bishnoi says, “We took a loan and built the diggi after getting government approval. Who is responsible for the investment we made? Were farmers told about the possible risk of the scheme being closed?” Bishnoi says Agriculture Department officials had told them that the money would come soon, but all they have received so far are repeated assurances.
Manuka says that when the central government is calling the scheme a successful and exemplary model, why is the payment of farmers who worked on the ground under the scheme still pending? He also asks: if farmers invest their own money because they trust a government policy, who should bear the risk if the policy changes or the scheme ends — the farmer or the government?
When asked about the matter, Agriculture Department Joint Director Yashwanti says that the Agriculture Department and district administration have written to the state government about it. The government has requested the Centre. The pending money under this scheme has to come from the central government. “As soon as we receive the money, we will make the payment to the farmers.”
Society
India Is Digitising Fertilizer Use. But Will It Help Farmers Use It Better?
India’s fertilizer management system now links fertilizer purchases with farmer, land and crop data, allowing authorities to track consumption, monitor supply chains and assess fertilizer requirements at the farm level.
For a farmer, fertilizer is not just another item in the supply chain. It can determine how much a crop grows, how much it costs to cultivate and, ultimately, how much a family earns from a harvest. For the government, however, it is also a massive logistical and financial exercise. Millions of tonnes have to reach farmers on time, while subsidies worth thousands of crores have to be tracked.
India is now trying to bring these two sides closer through data. The Integrated Fertilizer Management System (iFMS), the government’s digital platform for managing its production, imports, stocks, sales and subsidies, is being expanded to connect fertilizer purchases with information about farmers, land and crops. It already covers more than 14 crore Aadhaar-linked buyers, over 2.5 lakh retailers and around 7 crore fertilizer transactions every year.
If the government knows what farmers are buying, where they farm and what they are growing, it could get a clearer picture of how much fertilizer is actually needed. But, can better data change the way it is used, or will it simply make the existing system easier to monitor?
Tracking and Understanding its Use
Until now, much of iFMS has focused on following fertilizer through the system—from production and imports to retailers and sales. That is changing. New analytical tools can examine it’s purchases by crop, district, landholding and the type. The government says this can help identify unusual consumption patterns and emerging supply problems. The new Framework for Fertilizer Sale goes a step further. A farmer can book fertilizer using an AgriStack-linked identity after their land and ownership details are verified. A QR-based booking is then generated and matched with the eventual purchase at the retailer. The system can compare what the farmer said they needed with what they actually bought.
In theory, this gives policymakers a much clearer picture. Instead of simply knowing that a certain amount of fertilizer was sold in a district, they could begin asking: Which crops are using it? How much is being applied per hectare? And does the amount purchased make sense for the recorded farm and crop?
That could help with planning supplies and identifying unusual patterns. The government is also using vehicle-location tracking to follow its consignments while they are being transported. This is intended to make it easier to identify delays and unusual movement. For a country managing a huge fertilizer subsidy bill, that visibility matters. But fertilizer shortages and supply-chain leakages are only part of India’s fertilizer problem.
The Problem is Also What Farmers are Encouraged to Use
India has struggled for years with an imbalance in fertilizer use. One reason is price. Urea is sold at a controlled price, while several other fertilizers are covered under the Nutrient Based Subsidy system. This has contributed to a strong preference for nitrogenous fertilizer, particularly urea. PRS has highlighted the resulting imbalance as a concern for agricultural sustainability. But farmers do not make fertilizer decisions based on national nutrient ratios alone.
Their choices are influenced by crop, soil, price, availability, weather and advice from agricultural extension systems. This is why simply collecting more purchase data will not necessarily change fertilizer use. The real value of the system would come if that information could help connect what farmers are buying with what their crops and soils actually need.
ICAR has continued to emphasise balanced nutrient management and soil-test-based fertilizer recommendations as important for maintaining soil health and improving fertilizer efficiency.
What Happens When the Data is Wrong?
There is another issue that could determine whether the system works at the farm level: the quality of the data itself. The government acknowledges that its earlier efforts to connect fertilizer transactions with farmer, land and crop records exposed problems with the availability, completeness and quality of that information.
That matters because a digital record is only useful if it accurately describes the farm. A farmer may change crops. Land records may not reflect current cultivation. Agricultural land can be divided, leased or cultivated under arrangements that are not always captured neatly in administrative databases. If the information is outdated, the system may arrive at an “assessed requirement” that does not match what the farmer actually needs.
And that term—assessed requirement—is becoming important under the new framework. The system is designed to compare fertilizer requirements indicated during booking with actual purchases.
It Cannot Replace Agricultural Knowledge.
India already has several pieces of the puzzle. Soil testing can provide information about nutrient requirements. Crop data can show what is being cultivated. The purchase data can show what farmers are actually using. Logistics data can show where supplies are moving. Bringing these datasets together could help governments identify where fertilizer use is persistently high, where certain nutrients are underused and where farmers may need better agricultural advice.
But the system should not assume that more data automatically means better decisions. Indian agriculture varies enormously across regions. A fertilizer practice that makes sense for one crop or soil may not make sense for another. The government’s own experience with land and crop data shows why this matters. The challenge, therefore, is not simply building a larger database. It is making sure that the database reflects what is happening on the ground.
The Bigger Shift
The latest changes to iFMS point to a larger transformation in agricultural governance. The system is increasingly connecting production, imports, logistics, stocks, farmer and land information, fertilizer bookings, retail sales and subsidy payments. That could give policymakers something they have often lacked: a more detailed picture of how it moves from the supply chain to the farm.
But the success of this system is judged only by whether it can help India use fertilizer more efficiently, protect soil health and ensure that farmers receive what they actually need. For that to happen, the data must be accurate, farmers must be correctly represented in the system and digital assessments must account for the realities of farming. The next challenge is turning that information into better decisions—for farmers, for the soil and for the food system.
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