‘Power subsidy to industry from November 1’

Chief Minister Captain Amarinder Singh had made a formal announcement about the subsidy in the budget session of the Assembly. (File)

Already burdened with a bill for providing free power to farmers, Punjab government said Friday that it would roll out power subsidy to industry, with power at the rate of Rs 5 per unit, from November 1 onwards. In the agenda of the goverment’s Cabinet meeting scheduled October 16, power subsidies to industry is listed as part of the state’s industrial policy. If the Cabinet passes it, the state’s industry would get power at Rs 5 per unit.

Power subsidy to industry was a pre-poll promise of the Congress party in Punjab. Chief Minister Captain Amarinder Singh had made a formal announcement about the subsidy in the budget session of the Assembly. According to sources, while the revised tariff of all consumers, including domestic and commercial, will come into effect from April 1 onwards, the industry will get its subsidy from November 1.

Besides power subsidy, the government is also planning not to levy its share of State Goods and Service Tax (SGST) to provide a breather to the industry that has been hopping from Punjab to other states in the neighbourhood due to high input cost. To waive off SGST is also a part of the state’s industrial policy, said the sources. Also, the industrial policy is likely to help sick units, and emphasise on revival of industrial clusters in Ludhiana, Mandi Gobindgarh, Batala and Jalandhar. Medium and small-scale industries would also be the focus of the government.

The fund-crunched Punjab government, having a debt of Rs 2.08 lakh crore (including the guarantees) had set aside a whopping Rs 10,000 crore towards power subsidy to farmers. The amount also includes the arrears of last fiscal, not cleared by the previous government. The power regulator, in a recent communication to Punjab’s chief secretary, has reminded the state of a fat power subsidy bill of Rs 11,000 crore. It had stated that besides Rs 11,000 crore, free 200 units to poor families and the pending amount pertaining to last fiscal, the government would have to pay Rs 2,800 crore as subsidies to industry houses.

A functionary of the government, however, said that industry’s bill would not be more than Rs 1600 crore this fiscal, considering there are 5 lakh connections. The industry is being supplied power at the rate of Rs 5.47 per unit to Rs 6 per unit depending on its consumption. On each unit, the state charges 13 per cent excise duty, 5 per cent infrastructure development cess and 10 paise octroi on every unit.