Punjab's power subsidy bill now at Rs 16,400 crore

PATIALA: Even as the average cost of power for Punjab consumer in 2020-21 has come down by 18 paise a unit, the state's subsidy bill for the current fiscal has risen to 53% of the annual revenue requirement (ARR) of the Punjab State Power Corporation Limited (PSPCL). It means that power subsidies payment by the state government will alone account for more than half of the PSPCL's monetary needs. The subsidy bill of around Rs 16,400 crore has been approved by the Punjab State Electricity Regulatory Commission (PSERC) in its latest tariff order released on Monday.
The commission has determined the AAR of the power corporation to be around Rs 31,100 crore, against the demand of approximately Rs 41,721 crore. The subsidy bill for the year 2010-21 is of Rs 10,621 crore, which with dues from previous years add up to Rs 16,400 crore. The state government has to pay the amount by March 2021.
The rise in the state's subsidy bill is mainly due to hike in the cost of power being supplied to around 14 lakh agricultural connections in the state, which consume 12,334 million units a year. PSERC has hiked the cost of power by 9 paise per unit or Rs 22 per BHP per month for the agricultural connections. In addition, it has also imposed Rs 370 crore surcharge on AP consumption for non-clearing of the dues by the state government.
Last year, the state subsidy bill was Rs 9,674 crore with carry forwards of Rs 5,297 crore. The total subsidy bill for 2019-20 was Rs 14,972 crore, which has now swelled by another Rs 1,428 crore.
The commission in its order passed on March 18, this year, had asked PSPCL to continue with the existing tariff till the tariff order for FY 2020-21 was issued. Thus, the state government is now liable to pay the PSPCL a sum for Rs 1,268 crore per month for April and May, while the balance amount of subsidy of Rs 13,863 crore is required to be paid in advance in 10 monthly instalments. It is calculated at Rs 1,386 crore from June 2020 to February 2021, and Rs 1,386 crore in March 2021.
While calculating the cross-subsidies, PSERC noted that the state government would be providing free power worth Rs 6,810 crore to the agricultural connections, Rs 1,600 crore to the LS supply consumers, Rs 1,263 to the scheduled caste (SC) domestic supply, backward classes consumer will get free power worth Rs 173 crore, medium supply consumers will get a subsidy of Rs 165 crore and the small power industrial units will get Rs 162 crore due to the concessional tariff of Rs.4.99 unit. The non-SC below poverty line consumers will get Rs 75 crore, and the freedom fighter will get Rs 0.83 crore as subsidy on power this year.