Monday, July 06, 2020

Chandigarh

PSPCL’s financial survival hinges upon subsidy payment

VINOD GUPTA | June 03, 2020 03:51 PM

CHANDIGARH:The financial survival of Punjab State Power Corporation Limited (PSPCL) hinges upon on the payment of complete subsidy by Punjab Government.
The power subsidy bill payable by Punjab Government to Punjab State Power Corporation Ltd. (PSPCL) Is ₹16, 400 crore which is more than half of its annual revenue requirements of Rs 31000 crore approved by Punjab State Electricity Regulatory Commission (PSERC).

The PSERC in its tariff order has increased the AP category from Rs. 5.28 per unit to Rs. 5.57 per unit with the reduction of cross-subsidy from 17.82% to 14.41 % in line with the central government's desire to phase out cross-subsidies.

PSERC has calculated the subsidy amount of Rs. 10621 crore for the year 2020-21 and the arrears of last financial year stands out at Rs.5779 crore thus total subsidy payable becomes Rs. 16400 crore. The agriculture subsidy is Rs 6810 crore, Domestic power supply subsidy to SC/BPL/BC consumers are 1512 crore and to the small, medium and large supply industrial consumers this is 1927 crore.

Punjab Government in its letter to PSERC says that the state is committed to providing free power to agriculture consumers and subsidized supply to other categories of consumers and has provided Rs 12246 crore in it budget.

PSPCL has mentioned that 75% of the agriculture supply is given in the first half of the year and balances 25% in the second half of the year. In view of this 75% of the agriculture, the subsidy should be given in the first half of the year and balance afterward. PSERC has, however, allowed payment of subsidy on equal monthly installments. For the first two months, the subsidy amount was Rs 1268 crore per month as per last year’s pattern and for the next 10 months, it is Rs.1386 crore per month. For the first two months, the government has paid Rs.1041 crore subsidy against Rs. 2537 crore.

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