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Home / Cities / At ₹16,400 cr, power subsidy bill stands at 10% of Punjab budget

At ₹16,400 cr, power subsidy bill stands at 10% of Punjab budget

cities Updated: Jun 02, 2020 21:24 IST

Even as the covid-19 pandemic has dried up the Punjab government’s coffers, the power subsidy bill has crossed ₹16,400 crore, which is 10% of state’s budget for the current fiscal.

Even fiscal, the Punjab government had failed to compensate the Punjab State Power Corporation Limited (PSPCL) with the full subsidy amount and it fell short by ₹5,759 crore. The state government has failed to pay PSPCL the full subsidy amount in last five fiscals.

In the revised tariff order, the Punjab State Electricity Regulatory Commission (PSERC) has calculated ₹10,621 crore against the subsidy bill for free power to the agricultural sector, industry and other consumers. The PSERC calculated the accumulated subsidy payable by Punjab government at ₹16,400.3, including ₹5,779.05 crore due for the previous fiscal.

Of ₹10,621 crore subsidy calculated by the PSERC for 2020-21 fiscal, ₹7,180 crore account for agricultural sector,₹1,927 crore for industry, and ₹1,512 crore for domestic consumers belonging to Schedule Castes, Backward Classes and below poverty line (BPL) families.

Free power to farmers is the fulcrum of Punjab politics and political party is willing to bite the bullet of doing away with this freebie. Last week, the Punjab government first agreed to implement the central government’s direction on paying subsidy amount directly to the farmer, but it took a U-turn after strong opposition.

The PSERC has ordered the Punjab government to pay ₹1,268.6 crore subsidy amount each for April and May 2020. After the implementation of new tariff rates from June 1, the balance subsidy amount of ₹13,863.1 crore is required to be paid in advance in 10 monthly instalments of ₹1,386.31 crore for the period from June to March 2021.

Meanwhile, as per the budgetary estimates, the Punjab government has only earmarked ₹12,246 crore in its budget for power subsidy, but now it has to pay ₹4,000 crore more as per the final order of the PSERC for 2020-21 tariff.

The government has paid only ₹1,041 crore subsidy amount in advance to the PSPCL for the first two month of the current fiscal.

“Punjab government and PSPCL are caught in a vicious circle due to power subsidy. The government can’t back out from its promise, while it has not enough money to pay full subsidy amount to the power corporation. This is happening for five years. PSPCL then takes loan to meet its budget and burden of interest is passed on to the consumers,” said VK Gupta, spokesman of All India Power Employees’ Federation.

Blurb: State government has failed to pay PSPCL the full subsidy amount in last five fiscals

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