The idea of Direct Benefit of Transfer (DBT), being pushed by the Centre through the latest draft Electricity (amendment) Bill also, may not be workable in Tamil Nadu, given the volume and complex scheme of subsidy involved, according to officials dealing with the power sector.

Unlike in many other States, a host of categories of consumers is getting free or heavily subsidised power supply in Tamil Nadu. For example, around 2.1 crore domestic consumers are getting free power supply up to the first 100 units bi-monthly. Besides, depending upon the level of consumption, they are getting per unit subsidy of ₹1 or ₹0.5 for the consumption of another 100 units. Over 21.4 lakh farm connections, 11 lakh huts and 77,100 handloom weavers are getting free power supply, apart from lift irrigation cooperative societies. Places of worship and power looms are getting subsidised supply up to certain level of consumption. Of all these categories of consumers, only the two categories – domestic consumers and farmers – stand out in view of their consumption.

The Tamil Nadu Generation and Distribution Corporation (Tangedco), which is burdened with mounting losses, hopes to get about ₹8,400 crore from the State government towards tariff subsidy this year. Of this figure, the share of the domestic category comes to ₹3,500 crore, of which the free power component comes to ₹2,000-₹2,200 crore, and that of agriculturists, ₹4,300 crore. However, officials at the Tangedco point out that all these figures have been worked out on the basis of the 2014 tariff and this does not meet the actual cost adequately. On an average, it costs ₹8 per unit to the Tangedco to supply a unit of electricity. Then, the total amount of subsidy that the Corporation should get from the government will be more than ₹20,000 crore, of which the domestic category accounts for ₹9,600 crore and the farmers, ₹10,500 crore, the officials say.

Apart from economics, the free or subsidised power supply wields enormous importance in the political discourse of Tamil Nadu. Ever since the AIADMK regime led by M.G. Ramachandran implemented free power supply in September 1984 for “small farmers” and the DMK government, headed by M. Karunanidhi, extended it to “big farmers” in September 1990, there were two attempts - once in June 1992 and another March 2003 - to change the scheme but both ended in failure.