E-Paper
2025-26 fiscal: Punjab power subsidy touches ₹16k cr as PSPCL collects ₹4,700 cr in levies
Certified PSPCL records obtained under the RTI Act show that the ₹4,700 crore was collected through electricity duty, Infrastructure Development Fund, municipal tax, Dedicated Social Security Fund levy, cow cess and other statutory charges
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Punjab’s 300-unit free power scheme has enabled nearly 90% of the state’s domestic electricity consumers to receive subsidised power, with a large majority getting zero bill. At the same time, the state exchequer is paying nearly ₹16,000 crore to Punjab State Power Corporation Limited (PSPCL) and other government departments towards power subsidy.
This comes even as the power utility collected around ₹4,700 crore from some domestic consumers, besides commercial and industrial consumers, through various electricity-linked cess and statutory levies during 2025-26.
Certified PSPCL records obtained under the RTI Act show that the ₹4,700 crore was collected through electricity duty, Infrastructure Development Fund, municipal tax, Dedicated Social Security Fund levy, cow cess and other statutory charges. The figures highlight the contrasting flow of funds. While ₹4,700 crore was collected from consumers through statutory levies, the government paid around ₹16,000 crore to the PSPCL towards subsidised power supplied to beneficiaries.
90-lakh power consumers in state
The state has around 80 lakh domestic electricity consumers and 10 lakh commercial and industrial consumers. Of the domestic consumer base, nearly 90% are availing the government’s power subsidy, with a large majority receiving zero-bill electricity.
According to the RTI records, the PSPCL billed ₹4,893.89 crore under various statutory levies during 2025-26 and realised ₹4,700 crore. The collections included ₹2,026.06 crore as electricity duty, ₹1,192.83 crore as electricity duty for the dedicated social security fund, ₹1,203.42 crore as infrastructure development fund (IDF), ₹254.56 crore as municipal tax on electricity and ₹21.06 crore as cow cess.
The data, obtained by Sangrur-based senior advocate and RTI activist Kamal Anand, also revealed that the collections are not a recent phenomenon but part of a long-running revenue stream linked to electricity consumption.
The PSPCL collected ₹10,389.58 crore as IDF between 2015-16 and 2025-26, of which ₹10,165.38 crore was remitted to the Punjab Infrastructure Development Board (PIDB), the records show. In the first quarter of 2026-27 alone, ₹243.55 crore was collected as IDF against ₹296.70 crore billed.
Municipal tax collections under the electricity bill also touched around ₹1,728 crore between 2017-18 and 2025-26, while nearly ₹50 crore was collected under the head during the first quarter of the current financial year. Cumulative cow cess collections over the past decade have crossed ₹125 crore, according to the records.
Levy burden up, subsidised-power base expands
The levy burden has grown alongside the expansion of the state’s subsidised-power base. The RTI data shows that the number of domestic consumers receiving zero-bill benefits rose from 7.93 lakh in November 2021 to more than 31.34 lakh in December 2021 after a ₹3-per-unit tariff reduction. Following the launch of the 300-unit monthly free-power scheme in July 2022, the number of beneficiaries crossed 60 lakh during several billing cycles.
Punjab also provides fully subsidised power to more than 14.23 lakh agricultural tubewell connections, adding significantly to the state’s overall power subsidy expenditure.
Anand said the figures warranted greater transparency over the collection and utilisation of electricity-related levies.
“Consumers rarely notice how much they pay under taxes, duties and cesses on their electricity bills. The government should publish a detailed account of how thousands of crores collected through these levies are being utilised,” he said.
Industry raises concerns over charges
Industry and trade bodies have raised concerns over the cumulative impact of such charges, particularly because several levies are linked to electricity consumption. A rise in the underlying power bill can consequently increase the levy payable by consumers.
Vivek Kapoor, senior vice-president of the Mohali Industry Association, said the financial burden of the subsidy was being borne by the remaining 10% of consumers. “The state government should have set an income limit for availing the 300-unit free power subsidy. Even wealthy households are currently benefiting from the scheme,” he said.
