300 free units: Punjab domestic subsidies bill up Rs. 2,000 cr : La Tribune Inde


Tribune press service

Aman Soud

Patiala, April 16

Chief Minister Bhagwant Mann’s announcement on Saturday to allow 300 units of free electricity per month to every household will add around Rs 2,000 crore to the annual electricity subsidy bill that the state government has to pay to Punjab State Power Corporation Limited (PSPCL).

The PSPCL has an existing domestic subsidy bill of Rs 4,000 crore. With Mann’s latest announcement, the bill is expected to rise to Rs 6,000 crore. The government already owes the company around Rs 7,000 crore.

Rising debt trap

  • PSPCL has raised loans against its assets to meet emerging needs from time to time
  • The power company currently has outstanding loans amounting to Rs. 17,500 crores
  • He recently raised Rs. 100 crore loan to bridge the gap between demand and supply in the upcoming paddy season

Procrastinate on dues

  • Rs 4,000 cr is there any government of punjab national electricity subsidy bill
  • Rs 6,000 cr annual subsidy invoice after accounting for 300 free units
  • Rs 7,000 cr the government already owes the electricity company

With successive governments dithering on releasing payments in a timely manner, the PSPCL was bound to suffer, an official said. He said that despite massive profits, the company had to borrow against its assets to meet its needs. Lately, he raised a loan of Rs 100 crore to bridge the supply gap in the upcoming paddy season. The company has outstanding loans amounting to Rs 17,500 crore.

“Scheduled Caste and Backward Class communities and BPL consumers (below the poverty line) were already receiving free electricity up to 150 units per month. Now they will double their consumption to hit the 300 unit limit, which will only burden the company,” said a PSPCL insider.

The previous Congress government led by Charanjit Singh Channi had also, towards the end of its term, reduced the tariff by Rs 3 per unit for all domestic consumers with a load of up to 7 KW. “Since its creation, the PSPCL has paid the price for the policy of appeasement. As successive governments announce freebies to woo voters, society is pushed further into the debt trap,” the official said.

He said the agricultural sector subsidy has compounded PSPCL’s woes as despite assurances, the government has failed to settle pending bills on time. The sector is expected to consume some 4,500 MW during the paddy period.

“We have now raised another Rs 100 crore loan to ensure we have more power during the paddy season,” a senior PSPCL official said. He said electricity tariffs on the stock exchange were as high as Rs 11 to Rs 12 per unit and the provision of free electricity in such a situation must necessarily harm the PSPCL.

A former PSPCL official said that to meet the high demand for electricity, PSPCL had to buy 1,500 to 2,100 MW of electricity from outside sources and would have to use all its resources to pay the bill. “Given the current situation, the PSPCL will have to take out loans to pay salaries, leaving aside any development-related activities,” he said.

#bhgwant mann

Luisa D. Fuller