Freebies’ fiscal cost: Punjab doles out ₹50-cr daily power subsidy - Hindustan Times

Freebies’ fiscal cost: Punjab doles out 50-cr daily power subsidy

By, Patiala
Oct 20, 2022 11:22 PM IST

State’s subsidy bill has reached to whopping ₹24,865 crore, including arrears of ₹9,020 crore, for providing free electricity but state has managed to pay only ₹8,611 crore.

While 80% of domestic consumers have benefited from the Aam Aadmi Party government’s free power scheme, the freebie has financially crippled the Punjab State Power Corporation Limited (PSPCL).

Around 80% consumers are benefitting from the free power scheme of Punjab government. (Representational image)
Around 80% consumers are benefitting from the free power scheme of Punjab government. (Representational image)

According to the fresh PSPCL data, after implementation of free power to domestic consumers (upto 300 units per month), the state finance department letter dated July 5, calculated the subsidy cost (this includes free power to agriculture sector, industry and domestic consumers) for nine months as 12, 485 crore. This roughly comes out to be over 46 crore per day. The figure was calculated by considering that around 70% domestic consumers will be availing the benefit of free power. However, around 80% consumers are benefitting from the freebie, say PSPCL officials. The power corporation has already calculated the subsidy bill from April 22 to June 22 as 3,360 crore. The break-up comes out to be 2 crore per hour power subsidy to consumers or a daily power subsidy of nearly 50 crore approximately.

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State’s subsidy bill has reached to a whopping amount of 24,865 crore (including arrears of 9,020 crore), for providing the free electricity to various consumers. However, the state has managed to pay only 8,611 crores.

“Subsidy figures till October 15 suggest that 14,171 crore were due towards government for subsidy bills. However, the government paid 8,611 crore in cash. The PSPCL made book adjustments of 2,190 crore, which it has to pay to government for electricity duty, this makes the subsidy amount payable to tune of 10,801 crores. Still, we are short by 3,370 crores,” said a PSPCL official.

He, however, added that if compared to previous years, the AAP government is paying good amount of subsidy. However, on the other side, the worrying issue is that out of 80 lakh consumers, PSPCL is only billing 20 lakh consumers, which is industry, businesses, and generating only 4,000 crore revenue. “We are fully dependent upon the government for subsidy money, and this is affecting our financial decisions,” he said.

As per the mandate of the Punjab Government, PSPCL provides 300 units of free power to state consumers per month from July 1.

As per the notification, in case of bimonthly consumption of up to 600 units (300 units per month), there would be zero bill for all domestic consumers. This includes no energy charges, fixed charges, meter rent and government levies/taxes etc.Amongst the beneficiaries, majority of rural and urban poor, and those who are using load below 7 kilowatts, said an official.

“If trend remains same a subsidy of approximately 7,000 crore will be given to domestic consumers,” the official said.

From October till March, during winter months, the majority of consumers will benefit from the scheme, as the power consumption pattern shows that the consumption nose-dived after mid of October.

Power minister, Harbhajan Singh ETO said that free power supply to a certain limit of consumption is a flagship scheme of Punjab government to provide relief to consumers. He said that the government is committed to pay the subsidy bill.


Subsidy of 2022-23: 15,845 crore

Arrears: 9,020 crore

Total subsidy: 24,865 crore

Subsidy due till October 15: 14,171 crore

Subsidy paid by govt: 8,611 crore

Book adjustments: 2,190 crore

Subsidy dues despite payment, book adjustments: 3,370 crore

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