Power tariff cut to put Rs 5K cr burden

Ruchika M Khanna

Tribune News Service

Chandigarh, November 1

The Charanjit Singh Channi government’s power-populism announcements will cost the cash-strapped Punjab Rs 4,966 crore. The latest reduction in power tariff by Rs 3 per unit for those having a load of up to 7 KW will put an additional burden of Rs 3,316 crore on the exchequer.

Also read: Punjab slashes power tariff by Rs 3 per unit

Poll play by parties

• Ahead of 2007 polls, govt announced 200 free units for weaker sections, having up to 1KW load. In Feb 2010, units were cut to 100
• Ahead of 2012 polls, units were again raised to 200. Bill dues accrued to Rs40.92 crore, focring PSPCL to snap defaulters’ connections
• Later, the new Akali-BJP govt ordered re-connections, without reimbursing PSPCL. Dues now stand at Rs137.56 crore

Release dues

It is good that people are getting relief, but what about PSPCL? We have a huge unpaid subsidy bill. — Jasbir Singh Dhiman, PSEB

The big question is how Punjab State Power Corporation Limited (PSPCL) will manage its operations, considering the poor credit history it shares with the state government. For years now, the subsidy amount of any given year has been carried forward to the next fiscal.

Earlier, the Channi government announced a waiver of Rs 1,500 crore worth of pending bills of consumers having upto 2 KW load and also reduced the fixed charges on medium-scale industry by 50 percent, adding another subsidy of Rs 150 crore.

This fiscal’s power subsidy is Rs 10,668 crore, besides around Rs 7,000 crore of unpaid subsidy from the previous years. The government has to clear a subsidy of Rs 17,796 crore by March 2022. Eight months, the government is still to pay Rs 4,960 crore of subsidy to PSPCL.

As on November 1, it is paying Rs 600 crore a month as subsidy. As calculated at the time of the Budget, the government should be releasing Rs 1,483 crore each month to clear the subsidy bill. With the additional subsidy burden of nearly Rs 5,000 crore (this year, only Rs 2,083 crore will have to be paid from November to March, provided this is okayed by the Punjab State Electricity Regulatory Commission), the power subsidy burden is clearly becoming unbearable. 

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