Punjab: Subsidy rules may hurt free power programme

Chandigarh: The government’s financial problems could get worse because it must now pay the power subsidy to Punjab State Power Corporation Limited (PSPCL) in advance or risk imposing the unsubsidized tariff on all consumer categories.

Since the Electricity (Second Amendment) Rules, 2023 went into effect last week, the electricity regulatory commission will now be forced to issue an order for the implementation of the rate without subsidy due to the government’s incapacity to pay the subsidy it pays to consumers in advance.

This means that either the government will have to pay the entire quarter’s worth of subsidies — or about Rs 4,600 crore — in advance, or the consumers who receive subsidies would be responsible for paying the full cost.

The state’s overall expense for power subsidies for this fiscal year is Rs 20,243.76 crore. According to information made accessible to The Tribune, the government has paid its Rs 6,762 crore power subsidy bill as of July 31.

The second installment, worth Rs 1,804 crore, must still be paid in order to pay the remaining subsidy balance of Rs 9,020 crore. A senior official in the electricity department acknowledged, “It can be paid anytime during the course of the year, and the government will clear it.”

The power subsidy is typically not paid on schedule. Due to its unstable financial situation, the government frequently pays all subsidy obligations in full at the end of the year. The new regulations specify that the state electricity commission would take action against the concerned executives of the discom for non-compliance if the subsidy accounting and raising bills on the basis of electricity use for the subsidy is not determined to be in order.