There are no such things as “free lunches" and the people will have to
pay in the long run for the Punjab government's decision to give
each household 300 units of free electricity every month.
The financial viability of the PSPCL gets eroded, not because
of its inefficiency but due to political expediency. PSPCL has been bearing
the brunt of such largesse due to delayed and incomplete payment of subsidy
violating section 65 of the Electricity Act 2003.
The Punjab government has announced 300 units of free power for domestic consumers in the state from July 1, but with a caveat that they will have to pay the full bill if their usage exceeds 600 units in two months. In the case of SC/ST/BPL consumers with connected load up to 1 KW, they will be charged for the usage of additional units only.
There are a total of 73.50 lakh domestic consumers in the state and PSPCL has worked out that the scheme will cover about 61 lakh households where bi-monthly usage is less than 600 units.
There are reports that 45000 consumers have already applied for the second connection in anticipation of the implementation of this scheme. Now the number
of consumers will increase further.
The government has estimated that the power subsidy payable to PSPCL would be Rs 15, 846 crore during the current financial year This amount includes Rs 6, 947 crore on free power for the agriculture sector, Rs 2, 503 crore for the industrial sector, and Rs.6396 crores for domestic consumers. The domestic subsidy amount includes Rs. 1800 crores the cost of providing 300 units free to domestic consumers during the nine-month period. This implies that the estimated annual expenditure on this account will be Rs. 2400 crores. However, tPSPCL may be losing revenue
worth Rs 4, 000 crore per annum.
It may be mentioned that last year when the subsidised 300 units of power with load up to 7 KW for 68 lakh consumers was announced by the previous government,
a large number of consumers with more than 7 KW load reduced their connected
load to below 7KW to claim the benefits of reduced bills.
Earlier, free power to farmers used to constitute 70% of total subsidies,
and free power to scheduled caste, and other weaker sections constitute
14 percent of the total subsidies while subsidised power and industrial consumers
constitute 16% of total subsidies. Now as per budget provisions, subsidy
to the agriculture sector and domestic consumers stands at par
with 42.5% each, and the industrial sector at 15% of the total annual
subsidy amount. Punjab is the only state in the country where the subsidy has been given to the industry.
During the current financial year, the Punjab Government would have to pay a record Rs 24866 crores crore toward power subsidy to different categories of consumers The government has estimated Rs 15, 846 crore for power subsidy
and PSPCL has calculated an amount of Rs 9020 crore which is due from the
previous financial year.
The government should give needy consumers power at reduced rates instead of free power preferably at 50 % cost of average supply.