PM Surya Ghar: Muft Bijli Yojana : : Vaid ICS Institute

June 9, 2026

WHY IN NEWS:

India has rapidly scaled its renewable energy capacity, with solar power accounting for nearly 30% of total installed capacity.
Despite this, two flagship government schemes—PM Surya Ghar: Muft Bijli Yojana and PM-KUSUM—are performing well below their cumulative target of 40 GW of decentralized solar power, having achieved only ~13 GW as of May 31, 2026.

ABOUT PM SURYA GHAR:

Launched on February 15, 2024, by the Prime Minister to promote solar energy adoption and empower residential households to achieve energy self-reliance.
Aiming for 1 crore households by March 2027, the scheme is a cornerstone of India’s commitment to 500 GW of non-fossil fuel capacity by 2030.

KEY POINTS:

Objective: To provide 300 units of free electricity per month to eligible households through rooftop solar (RTS) installation.
Outlay: Sanctioned budget of Rs 75,021 crore.
Model: It utilizes a Grid-Tied system with Net Metering, allowing households to sell surplus power to local DISCOMs.
Subsidy Structure:
- Up to 2 kW: Rs 30,000 per kW.
- Additional capacity (2-3 kW): Rs 18,000 per kW.
- Maximum subsidy: Capped at Rs 78,000 for systems of 3 kW and above.
Collateral-free Loans: Facilitated at low interest rates (approx. 7%) for installations up to 3 kW.

ABOUT PM-KUSUM:

Launched in 2019, PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) is currently in a transitional phase.
While the initial Phase 1 target was to reach 34.8 GW by March 2026, the deadline has been extended to March 31, 2027, for ongoing projects.
PM-KUSUM 2.0 is currently in the design stage, with a 66% increase in budget allocation for FY 2026-27, signaling renewed government focus on scaling decentralized rural solar power.

KEY POINTS & SCHEME COMPONENTS:

Objective: To de-dieselise the farm sector, provide water/energy security to farmers, and enhance income by converting “Annadata” (food provider) to “Urjadata” (energy provider).
Component A: Installation of decentralized ground-mounted grid-connected solar plants (up to 2 MW) on barren/uncultivable land by farmers/cooperatives. Surplus power is sold to DISCOMs.
Component B: Installation of standalone off-grid solar-powered agriculture pumps for areas without grid connectivity.
Component C: Solarisation of existing grid-connected agriculture pumps (individual pump solarisation or Feeder-Level Solarisation – C-FLS).
- Note: Feeder-Level Solarisation (C-FLS) has emerged as the preferred model, where DISCOMs install larger solar plants to supply power to entire agricultural feeders, ensuring reliable daytime power.

ABOUT AIF:

The Agriculture Infrastructure Fund (AIF) is a pan-India Central Sector Scheme launched in July 2020 under the Atmanirbhar Bharat Abhiyan.
It is a dedicated financing facility designed to provide medium- to long-term debt financing for investment in viable projects related to post-harvest management infrastructure and community farming assets.

KEY FINANCIAL FEATURES:

Fund Size: A total corpus of Rs 1 Lakh Crore.
Interest Subvention: A 3% per annum interest subvention on loans up to Rs 2 crore, provided for a maximum period of 7 years.
Credit Guarantee: Coverage is available under the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) for loans up to Rs 2 crore, reducing the risk for lending institutions.
Interest Rate Cap: To keep it affordable, the interest rate charged by lending institutions is capped at a maximum of 9%.
Moratorium: The repayment period ranges from 6 months to 2 years.

WHO IS ELIGIBLE?

Individual Farmers, FPOs (Farmer Producer Organizations), and PACS (Primary Agricultural Credit Societies).
Agri-entrepreneurs and Startups working in the agriculture sector.
Self Help Groups (SHGs) and Joint Liability Groups (JLGs).
State agencies, APMCs, and Public-Private Partnership projects sponsored by government entities.

WHAT PROJECTS ARE COVERED?

Post-Harvest Management: Warehouses, silos, cold storage, cold chain, supply chain services, e-marketing platforms, and sorting/grading units.
Community Farming Assets: Infrastructure for smart/precision agriculture, custom hiring centers, and facilities for organic input production.