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In quarter 1,Punjab gives only 40% of power subsidy to PSPCL

The power regulator calculated Rs 13,712 as subsidy for 2018-19, this includes arrears of the past two years of around Rs 4,000 crore.

punjab Updated: Jul 08, 2018 12:47 IST
Vishal Rambani
Vishal Rambani
Hindustan Times, Patiala
Punjab,punjab news,PSPCL
Functioning with a subsidy shortfall of around Rs 2,077 crore, the PSPCL is being forced to arrange loans to meet day-to-day requirement of cash.(HT File)

The Punjab government continues to default on power subsidy payments to the Punjab State Power Corporation Limited (PSPCL), even after giving an undertaking to the power regulator that it will pay this in advance. For the first quarter of this fiscal, against the required amount of Rs 3,430 crore, the PSPCL has received only Rs 1,352 crore (around 40%).

Functioning with a subsidy shortfall of around Rs 2,077 crore, the PSPCL is being forced to arrange loans to meet day-to-day requirement of cash. “In the first two months, the amount paid was negligible. In June, against the required amount of Rs 1,144 crore, the actual receipt was Rs 614 crorewhich is54%; the default was Rs 530 crore,” said a PSPCL official. He added that the management had taken up the matter with the government, to no avail.

“The government cites its financial crunch for non-release of subsidy. However, the PSPCL is bearing a lot of stress. Summers are at peak, and we have to spend on buying coal and power. We face a cash crunch. These are hard times. The state government has failed to pay us. Consequently, we have also defaulted on payments to power suppliers and other contractors,” said an official, on the condition of anonymity.

Payment default on for 3 years

Significantly, the government has been defaulting on payment for three years. The power regulator calculated Rs 13,712 as subsidy for 2018-19, this includes arrears of the past two years of around Rs 4,000 crore.

On June 5, the power regulator had directed, “Financial distress in the power distribution utility adversely affects consumers in the state. The commission has directed in its tariff order that the arrears of subsidy and subsidy due in 2018-19, as per the government’s commitment be paid in advance monthly instalments,” and ...“if the government fails to do so, the PSPCL is free to charge subsidy from consumers”.

Retired chief engineer Padamjit Singh, who had filed the petition that led to this direction of the regulator, told HT, “These directions and statements are true and operative even now. However, it is seen that instead of covering up the subsidy default of April, May in June, the government defaulted again. This is gross contempt of Sec 65 of the Electricity Act 2003as well as the orders of the regulator.” He added that if the Punjab government did not follow the orders, he would move high court for release of advance subsidy.

PSPCL chairman-and-managing director Baldev Singh Sran could not be contacted for comment. However, his office said he had taken up the matter of early release of subsidy arrears with the chief secretary and the finance department.

First Published: Jul 08, 2018 12:46 IST