Electricity for agricultural pumping in Punjab has been free since 1997. About fourteen lakh tubewells run on it.
The policy is politically untouchable. Every party has promised to keep it and none has proposed removing it, because a farmer whose margin is already negative cannot absorb the cost and because the constituency is decisive.
The consequences are a subsidy bill of many thousands of crores a year carried by the state and by the power utility, cross-subsidised from industry, which raises industrial power costs and is one reason Punjab has lost manufacturing to neighbouring states.
It also removes any price signal on groundwater, which is the resource actually being consumed. A tubewell that costs nothing to run will run.
Every serious analysis of Punjab's water crisis identifies free power as a central mechanism, and no analysis has produced a politically survivable alternative. Direct benefit transfer has been proposed repeatedly and never implemented at scale.
Free power to agriculture was introduced in 1997, withdrawn, and restored, and it has been politically untouchable since. The cost appears as a subsidy paid by the state to the power utility.
Because the pump costs nothing to run, there is no price signal at all on groundwater. The link between free power and the falling water table is the most direct causal chain in Punjab's problems.
Metering agricultural connections has been attempted and abandoned more than once. Without meters there is no measurement of how much water is actually lifted, which means the central fact of the state's crisis is estimated rather than known.