PSPCL in the red as state fails to give subsidy

Yogindra Mohan
Patiala

The Punjab State Power Corporation Limited (PSPCL) fears debt trap as the state government has failed to give cash subsidy for free power.

The Punjab State Electricity Regulatory Commission (PSERC) in its tariff order for 2011-12 has directed the Punjab government to pay Rs 4188.92 crore for free power to a group of consumers with a monthly installment of Rs 349.08 crore. The Punjab government paid monthly installment of Rs 190 crore for April and May and Rs 282.69 crore per month for subsequent months. The Punjab government also adjusted Rs 981.93 crore on account of power bonds issued long back to National Thermal Power Corporation (NTPC) for its outstanding dues.

According to sources in the PSPCL, after assembly elections in Punjab the state government has not paid any subsidy to the PSPCL. The financial position of Punjab is so bad that bills of more than Rs 2200 crore are pending with treasuries. The finance department has shown its inability to pay pending subsidy of Rs 978 crore.

The policy of free power to agriculture sector, SC/ ST families and last to be added in the list is BPL families is being followed by the state government. Despite the commitment of the state government to the PSERC to pay cash subsidy in advance every month the state falters every year. It makes book adjustment in lieu of cash subsidy pushing the PSPCL in to a debt trap.

It is an open secret that the PSPCL is in debt trap because of the free power. Even the PSERC can be held responsible for the financial position of the PSPCL as it disallows genuine expenditure.The petition of Gurnek Brar regarding nonpayment of cash subsidy by the government was dismissed by the PSERC and he appealed to Appellate tribunal against this. The Appellate Tribunal reserved its judgment on this last week.