Kejriwal’s promise of free power may cost Punjab ₹5,000 crore a year

Aam Aadmi Party (AAP) national convener Arvind Kejriwal’s promise of providing 300 units of electricity free to every household every month if his party forms government in Punjab will have a significant budgetary ramification for the state exchequer as the annual power subsidy bill is likely to cross ₹15,000 crore from the existing ₹10,668 crore

Aam Aadmi Party (AAP) national convener Arvind Kejriwal’s promise of providing 300 units of electricity free to every household every month if his party forms government in Punjab will have a significant budgetary ramification for the state exchequer as the annual power subsidy bill is likely to cross ₹15,000 crore from the existing ₹10,668 crore.

Aam Aadmi Party national convener Arvind Kejriwal in Chandigarh on Tuesday.

The state has a total of 80 lakh power consumers of which 50% are already availing subsidy. The Delhi chief minister’s announcement, if implemented, will make all the consumers eligible for subsidy.

The AAP government in the national capital has been able to sustain the free power subsidy for Delhi residents through a significant reduction in losses due to electricity theft.

Also, the Congress high command’s instructions to the Amarinder Singh government to consider giving 200 units of free power to urban domestic consumers will also enhance the subsidy burden if the proposal is implemented.

If the next government gives free 300 units to all domestic consumers, the total domestic subsidy will touch the highest in country. Of ₹10,668 crore power subsidy bill for the current financial year in Punjab, ₹6,735 crore is in free electricity for farmers.

“Though exact calculations can’t be made right now, this will increase the power subsidy bill by another ₹5,000 crore even by conservative estimates,” said VK Gupta, a power sector expert.

“But here the catch is that you have to pay the entire bill if the consumption crosses beyond 300 units,” he added.

A senior corporation official said, “Delhi gives ₹1,600 crore annual power subsidy while we already are giving over ₹10,000 crore for the same. The subsidy amount ultimately comes from the pockets of consumers. But it is not good either for the Punjab State Power Corporation Limited (PSPCL) or the power sector on the whole.”

Earlier, the Punjab State Electricity Regulatory Commission (PSERC) in its tariff order announced a reduction of 50 paise to ₹1 per unit for domestic consumers in the state. The move resulted in a relief to 69.15 lakh consumers.