Punjab Newsline
Punjab going for book adjustment of subsidy due to PSEB
VINOD KUMAR GUPTA
Friday, 19 March 2010
CHANDIGARH: Punjab Government is likely to go for book adjustment of pending cash subsidy due to PSEB despite its written commitment given to Punjab State Electricity Regulatory Commission.

Punjab Government has written a letter to PSEB conveying its intention of recalling loan to the extent of Rs. 1100 crore and adjusting it against the subsidy arrears.

According to sources the financial position of board is very precarious. The arrear of subsidy due from Punjab Government is 1400 crore and PSEB has to repay a loan of Rs 500 crore this month. Moreover the over-drawing limit of Rs 200 crore has already been exhausted by the board.

Punjab Government is paying PSEB monthly subsidy of Rs.216.59 crore as per budgetary allocations made by Punjab Government and not Rs.294.35 crore. The arrears of subsidy up to February 23 this year were Rs 1116.33 crore. Further Government has not paid the amount of Rs 386.17 crore as per PSERC tariff order of September 2009.

Punjab Government had committed to PSERC through letter dated September 2 2009 that it will pay cash subsidy to PSEB in lieu of free power to be given to different groups of consumers as directed by the government.

It may be mentioned that under similar circumstances Punjab Government had recalled a loan of Rs. 1362 crore and this was adjusted against subsidy due to PSEB.

PSERC in its tariff order dated September 13 2007 had mentioned that the subsidy payable by the State Government to PSEB needs to be paid in advance as per requirement of the law. In this view of the matter, the question of any adjustment of subsidy towards principal (loans) does not arise.”

The book adjustment of outstanding loan against subsidy is not permissible under section in 65 of Electricity Act 2003.

Padamjit Singh Chief Engineer (Retd.) PSEB said that the proposed move of Punjab Government to adjust Rs 1100 crore loan against subsidy is contrary to written commitment given by it to PSERC. It is infringement of Commission order of September 13 2007 and September 8 2009.