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10% of Punjab budget to go towards power subsidies
Out of the total outlay of ₹2.04 lakh crore for the upcoming fiscal, a whopping ₹20,477 crore will go towards power subsidies in the form of free electricity to farmers and domestic users, and subsidies for industrialists.
With power subsidies accounting for 10% of the total budgetary allocation of Punjab for the financial year (2024-25), it seems that political compulsions and populist promises will continue eating into the state’s finances.
Out of the total outlay of ₹2.04 lakh crore for the upcoming fiscal, a whopping ₹20,477 crore will go towards power subsidies in the form of free electricity to farmers and domestic users, and subsidies for industrialists.
Presenting the state budget on Tuesday, Punjab finance minister Harpal Singh Cheema said, “Our government is committed to our “Annadatas” (farmers) and as a gesture of our continued support to them, we have allocated ₹9,330 crore towards power subsidy for agriculture.”
This is the biggest-ever free power allocation to the agriculture sector in the recent years.
For tariff concession to various industries, the finance minister has proposed a budgetary allocation of ₹3,367 crore.
With 90% of domestic consumers currently receiving zero electricity bills, thanks to the AAP government’s pre-poll promise of 300 units of free power a month to each household, an allocation of ₹7,780 crore has been made to this end. Though successive governments have been offering freebies to people, starting with the Shiromani Akali Dal which came up with free power to farmers for tubewells in 1998, the free electricity subsidy offered by AAP this time is the highest in the history of the state.
On the brighter side, however, experts say that the AAP government has a better track record of clearing the subsidy bills. So far, the AAP government has paid for almost 80% of power subsidies till February 15 to Punjab State Power Corporation Limited (PSPCL). Almost half of PSPCL’s revenue comes from government subsidies.
Though Punjab State Electricity Regulatory Commission (PSERC) is yet to work out the subsidies for various sectors in its tariff decision due in March 2024, an expert said the subsidy bill is set to inflate by another ₹500 crore. The AAP government has been paying ₹1,800 crore per annum to PSPCL for outstanding subsidies.
