With subsidy dues that the Punjab government owes to the Punjab State Power Corporation Limited (PSPCL) running into Rs 5,000 crore, the cabinet, on Tuesday, allowed an increase in electricity duty by 2 percentage points, taking it to 15%. This means that bill of each consumer will also increase by 2%.
The duty will be applicable on domestic, commercial and industrial consumers and the increase will help the state government fund the subsidy dues. The additional burden on the state’s power consumers will be Rs 150 crore.
The total collection from the duty will now touch Rs 1,125 crore from the Rs 975 crore now. An official in the power department said, “The state government does not need clearance from the Punjab State Electricity Regulatory Commission (PSERC) for increasing the duty, as the role of the regulator is to decide base rate power tariff annually.”
After the pronouncement of tariff for the current financial year in October, the state government could only pay Rs 350 crore subsidy for free power — Rs 100 crore each in October and December, 2017, and Rs 50 crore and Rs 100 crore in January and February, 2018.
PSPCL chairman-cum-managing director A Venu Prasad said, “Imposing duties is the domain of the finance department. The power department has no role in it and only deals with collection.” He said he was not aware of the 2% increase in electricity duty.
{{/usCountry}}PSPCL chairman-cum-managing director A Venu Prasad said, “Imposing duties is the domain of the finance department. The power department has no role in it and only deals with collection.” He said he was not aware of the 2% increase in electricity duty.
{{/usCountry}}Under finance department rules, the duty on electricity that PSPCL collects is deposited into government treasury. However, for the past many years, the state government has been directing PSPCL to retain the duty and adjust it against the state’s subsidy against free power to agriculture tubewells.
“PSPCL has been raising loans to meet its day-to-day expenditure. In a few months, it will become tough to even raise loans. This is like a drop in the ocean,” an official said, on condition of anonymity.