Power subsidy up three times in 10 yrs, may touch Rs 20K cr

Tribune News Service

Aman Sood

Patiala, November 13

Political compulsions and poll promises are set to take a huge toll on the state’s finances as power subsidy has risen by more than three times during the last decade, putting additional burden on the state government. The power subsidy in 2013-14 was Rs 6,324 crore and expected to touch Rs 20,000 crore by this fiscal.

The increase has occurred mainly in the past three financial years after free and subsidised power supply to domestic consumers started. In 2021-22, the subsidy was Rs 10,679 crore, which rose to Rs 15,845 crore in 2022-23 and then Rs 18,714 crore in the current financial year.

The cash-strapped Punjab State Power Corporation Limited (PSPCL) has remained under severe financial strain due to defaulting amount of consumers, especially by the state government departments, and increasing interest on the long-term and short-term loans.

The Punjab State Electricity Regulatory Commission (PSERC) has worked out a subsidy of Rs 10,668 crore payable to different consumer categories for 2021-22. It comprises Rs 6,735 crore for agriculture pump-set consumers, Rs 1,627 crore for Scheduled Caste, backward class and below poverty line domestic consumers and Rs 2,266 crore for industrial consumers.

“About 75 per cent of its population depends directly on agriculture. There are approximately 14.23 lakh tubewells in the state and the total subsidy borne by the state was Rs 5,733 crore for 2018-19 and Rs 6,060 crore for 2020-21,” experts said.

All India Power Engineers Federation spokesman VK Gupta says that the rising subsidy bill for the government is not a good sign for the power sector, which has to rely on more debts to pay salaries. “There are no such things as free lunches and the people will have to pay in the long run for the government’s rising subsidy bill,” he said.

Gupta added that in Punjab, only about 4 per cent of domestic electricity consumers are left who do not get any subsidy. “The remaining 96 per cent get a subsidy of 600 units of electricity. This cannot continue in the longer run as the government spends what it collects from the people,” he stated.

A senior PSPCL official said as long as the state government cleared their dues in time, the subsidy bill was not an issue for the PSPCL. “However, in the long run people have to understand that there is nothing for free and they will have to bear additional taxes as the Central Government is tightening strings against free power and increasing subsidies,” he stated.

Need to rationalise subsidies

There is a need to rationalise the subsidies. Poll promises are important, but these should be limited to the needy sections only. There are no such things as free lunches and people will have to pay in the long run for the government’s rising subsidy bill. — VK Gupta, All-India Power Engineers Federation spokesman

About The Author

Tribune News Service

The Tribune News Service brings you the latest news, analysis and insights from the region, India and around the world. Follow the Tribune News Service for a wide-ranging coverage of events as they unfold, with perspective and clarity.

Join Whatsapp Channel of The Tribune for latest updates.