Punjab: Free power scheme may take a hit with new subsidy rules

Ruchika M Khanna

Chandigarh, August 2

The government’s fiscal woes could aggravate as it will now have to pay the power subsidy to Punjab State Power Corporation Limited (PSPCL) in advance or risk the imposition of the unsubsidised tariff on all categories of consumers.

With the Electricity (Second Amendment) Rules, 2023, coming into force last week, the inability of the government to pay the subsidy it gives to consumers in advance will now force the electricity regulatory commission to issue order for the implementation of the tariff without subsidy.

Total subsidy bill Rs 20,243 crore

• The total power subsidy bill of the state is Rs 20,243.76 cr
• Till July 31, the govt has cleared its power subsidy bill of Rs 6,762 cr
• The second instalment of Rs 1,804 crore (to clear the outstanding subsidy amount of Rs 9,020 crore) is yet to be paid

It means that the government will now have to pay the entire subsidy for a quarter — nearly Rs 4,600 crore — in advance, or the subsidised category of consumers will have to pay the entire tariff.

The total power subsidy bill of the state for this fiscal is Rs 20,243.76 crore. Information available with The Tribune shows that till July 31, the government has cleared its power subsidy bill of Rs 6,762 crore.

However, the second instalment of Rs 1,804 crore (to clear the outstanding subsidy amount of Rs 9,020 crore) is yet to be paid. “It can be paid anytime during the course of the year and the government will clear it,” confirmed a top official in the power department.

Generally, the power subsidy is not paid timely. Often, the government, because of its precarious fiscal condition, also clears the entire dues of subsidy towards the end of the year. The new rules mention that if the subsidy accounting and raising bills on the basis of electricity consumption for the subsidy is not found in order, the state electricity commission will take action against the officers concerned of the discom for non-compliance.

Another major problem brewing is the piling up of unpaid power bills by government departments, especially the Local Government Department. According to information, departments have not cleared their power tariff bills for almost two years now, leading to dues of nearly Rs 3,000 crore to Punjab State Power Corporation Limited (PSPCL).

The government reportedly failed to fulfil its commitment to pay the one-third of legacy dues amounting to Rs 870 crore up to March 2023. During the fiscal, the government is to pay second instalment of Rs 870 crore along with last year pending instalment and previous year arrear of Rs 300 crore, besides bills of the current year.