Free 300 Units: Domestic subsidy bill in Punjab up by Rs. 2,000 cr

Tribune News Service

Aman Sood

Patiala, April 16

Chief Minister Bhagwant Mann’s announcement on Saturday to allow 300 units of free power per month to every household will add about Rs 2,000 crore to the annual electricity subsidy bill that the state government has to pay Punjab State Power Corporation Limited (PSPCL).

The PSPCL has an existing domestic subsidy bill of Rs 4,000 crore. With Mann’s latest announcement, the bill is expected to rise to Rs 6,000 crore. The government already owes the corporation about Rs 7,000 crore.

Rising debt trap

• PSPCL has been raising loans against its assets to meet the emergent needs from time to time
• The power corporation currently has outstanding loans amounting to Rs. 17,500 crore
• It recently raised Rs. 100 crore loan to meet the demand-supply gap in upcoming paddy season

Dithering on dues

• Rs 4,000 cr is existing domestic power subsidy bill of punjab government
• Rs 6,000 cr annual subsidy bill after 300 free units are accounted
• Rs 7,000 cr the government already owes to the power corporation

With successive governments dithering on timely release of payments, the PSPCL was bound to suffer, said an official. He said despite massive earnings, the corporation has had to raise loans against its assets to meet its needs. Of late, it has raised Rs 100-crore loan to meet the supply shortfall during the upcoming paddy season. The corporation has outstanding loans amounting to Rs 17,500 crore.

“The Scheduled Caste and Backward Class communities and the BPL (below poverty line) consumers were already getting free power up to 150 units per month. Now, they will double their consumption to touch the limit of 300 units, which will only burden the corporation,” said a PSPCL insider.

The previous Charanjit Singh Channi-led Congress government had also, towards the end of its tenure, had reduced the tariff by Rs 3 per unit for all domestic consumers with load up to 7 KW. “Since its inception, the PSPCL has been paying the price of appeasement politics. As successive governments announce freebies to woo voters, the corporation gets further pushed into the debt trap,” said the official.

He said the agriculture sector subsidy had been aggravating the PSPCL’s woes as despite assurances, the government wasn’t clearing pending bills on time. The sector is expected to consume some 4,500 MW during the paddy period.

“We have now raised another loan of Rs 100 crore to ensure we have more power during the paddy season,” a top PSPCL official said. He said the power rates on the exchange were as high as Rs 11 to Rs 12 per unit and supplying free power in such a situation was bound to harm the PSPCL.

A former PSPCL official said to meet the high power demand, the PSPCL had to buy 1,500 to 2,100 MW of power from outside sources and would need to utilise all its resources to foot the bill. “Given the current situation, the PSPCL will have to take loans to pay salaries, leave aside any development-related activity,” he said.

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