Punjab likely to reduce power tariff | punjab | Hindustan Times
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Punjab likely to reduce power tariff

punjab Updated: Jan 27, 2014 20:24 IST
Vishal Rambani

With Haryana and New Delhi announcing a reduction in power tariff, recently, something similar may be in the offing for the majority of domestic consumers in Punjab.

With the Lok Sabha elections in mind, the government plans to reduce the rates by passing on all or some of the subsidy. Relevant files from Punjab State Power Corporation Limited (PSPCL) have been called in, sources told HT.

Significantly, in case tariff is reduced, the government does not need to take any approval from the regulatory commission, as it can take a political decision on subsidies.

The average domestic tariff in the region is the highest in Punjab at Rs 6.64 per unit and some relief at lower slabs can be expected, the source added.

PSPCL officials claimed to have no knowledge of the development. Sources, however, said that the office of the deputy chief minister Sukhbir Singh Badal, who is also the SAD president, has asked department mandarins to submit a report on the likely financial impact of a revision in tariff.

Sukhbir has specifically quizzed officials on the likely scenario of a reduction in tariff for consumption below 300 units and for giving subsidy to all at a flat rate.

The likely route for reduction

The most likely way in which a power tariff cut could materialise is by reduction in octroi and electricity duty. The state charges 10 paise per unit as octroi and an average of 70 paise per unit as electricity duty and both are credited to government account.

If these are passed on the consumer, power tariff reduces by 10%. The state offers Rs 5,000-crore subsidy to agriculture. Financial experts have always been against reduction or passing on of subsidies. In spite of several attempts, power secretary Anirudh Tiwari could not be contacted.

Over the last four years, Punjab has revised rates between 7.58 % and 12.08%. Haryana increased tariffs
19% in 2012-13 and 13% in 2013-14, after no tariff revisions in earlier years. The state rolled back the tariff hike from January 1 this year. In Delhi, rates have been hiked between 5% and 16.7% over the last three years.