MP govt's decision to waive power dues will cost exchequer, discoms over Rs 5,100cr

Madhya Pradesh Chief Mminister Shivraj Singh Chouhan has again announced to waive power dues of around 88 lakh families, reports The Times of India. This move comes ahead of the assembly polls, scheduled to be held later this year.

However, such a waiver will cost the exchequer over Rs 5,100 crore, of which the government will pay Rs 1,806 crore as subsidy to discoms; 50 percent of the bill, or Rs 1,806 crore, will be borne by discoms, which will also have to forgo the surcharge — close to Rs 1,500 crore — on defaults.

In 2013, the Chouhan-led government had announced a similar waiver which had burdened the state government with an amount of Rs 2,000 crore of which the government paid a subsidy of Rs 652 crore while the rest was borne by discoms.

Also read: COMMENT- What makes Madhya Pradesh tick?

Below Poverty Line (BPL) families, unorganized labourers and those who come under the Mukhya Mantri Jan Kalyan Yojana will benefit from a scheme called ‘Saral Bijli Bill Scheme', announced by Chouhan this week.

Under the scheme, which will start from June 13, power will be given to BPL households at Rs 200 per month. After August, beneficiaries will get power at a flat rate of Rs 200 per month, for which they may use one fan, one light bulb and a television.

The move, which is being considered a masterstroke, will cover nearly 2.5 crore voters — half of state's electorate — in just one sweep.

However, Chouhan will have a tough battle to fight as the Congress has ramped up preparations for elections in the state, where the anti-incumbency factor will play a huge part as Chouhan seeks a fourth consecutive term.