16 Jun 2012 Hindustan Times (Chandigarh)
Vishal Rambani [email protected]

Power subsidy eats into 10% budget

Government to pay subsidy bill of R5,785 crore to PSPCL this year; tariff hike on cards
PATIALA : Nearly 10% of Punjab’s budget for the year 2012-13 will go towards meeting the cost of free power. The state government will be paying a subsidy bill of Rs 5 ,785 crore to the Punjab State Power Corporation Ltd (PSPCL), up by Rs 1,600 crore from last year, to make up for the free power being provided by it to farmers , scheduled castes and BPL families.

On the basis of the annual revenue requirement (ARR) petition filed by the PSPCL on power tariff hike, the Punjab State Electricity Regulatory Commission (PSERC), which decides the power tariff, has worked out a subsidy bill of Rs 5,785 crore. It had sent a letter to the Punjab government in April, seeking its approval to the tariff hike. However, the government kept the issue pending in wake of the MC elections. The finance department has now approved the subsidy bill.

Power secretary Anirudh Tiwari told HT that the government would continue to provide free power to the farm sector and weaker sections. “The finance department has approved the subsidy bill, and we will forward it to the PSERC,” he said.
As per the breakup of the subsidy bill, Rs 4,780 crore will go towards the agriculture sector, Rs 690 crore towards consumers of the scheduled caste category and Rs 36 crore towards BPL families.

The subsidy bill was Rs 500 crore when the free electricity policy was introduced in the state in 1997. The PSPCL claims that 30% of the electricity supplied by it goes towards the free power being provided to the agriculture sector, a claim denied by farmers’ organisations, which allege that the PSPCL has inflated the figures by including power thefts and other losses in the agriculture sector head.

The PSERC is likely to announce the tariff hike in the next two weeks. While the PSPCL has proposed a hike of 53%, the PSERC is likely to allow only up to 15% hike.