Power subsidy burns hole in govt’s pocket; owes Rs 29,659 cr to PSPCL

Aman Sood

Patiala, June 15

The rising power subsidy to consumers is burning a hole in the pocket of the state government, making the already cash-strapped Punjab State Power Corporation (PSPCL) more dependent on the payments to be released by the government.

According to the latest tariff order issued by the Punjab State Electricity Regulatory Commission (PSERC), the net revenue receipts expected by the PSPCL in 2024-25 will be Rs 48,462 crore and the amount of subsidy to be paid by the state government is Rs 21,909 crore.

Heading for crisis

Very quickly, Punjab is heading towards a serious financial crisis, courtesy non-visionary politicians and society expecting everything for free. The state’s power sector will be the first casualty as, despite doing its best, the sector reforms are last on the priority list of successive governments, leading to the repeated power outages in many parts of the state. — PSPCL official

However, according to a data, in addition to the subsidy, as announced by the PSERC, the total subsidy after adding the pending amounts, including defaulting government departments, carry forward arrears will mean Rs 29,659 crore of annual subsidy burden on the government. Interestingly, the government’s total budget is a little over Rs 2.04 lakh crore.

The power dues of government departments have been pending for the over two years and they owe PSPCL Rs 3,500 crore, which will also get added into the subsidy bill, as it is the responsibility of the state government.

“The government has also to give instalments of Rs 1,800 crore along with its interest/carrying cost of Rs 500 crore for pending subsidy payments of previous years. Further, pending arrears instalment and its interest/carrying cost will mean another Rs 1,950 crore which is still unpaid. The total is Rs 4,250 crore of pending amount”, said senior officials.

Information gathered from the PSPCL confirms that the total amount of subsidy to be paid by the government after adding the pending government bills, arrears and interest amount will touch Rs 29,659 crore, which will be around 60 per cent of the PSPCL’s total annual expected receipts.

A former chief engineer with PSPCL said such a fat subsidy bill will only fast forward Punjab’s financial mess. “Very quickly, Punjab is heading towards a serious financial crisis, courtesy non-visionary politicians and society, expecting everything for free. The state’s power sector will be the first casualty as, despite doing its best, the sector reforms are on the last bucket list of successive governments, leading to the repeated power outages in many parts of the state”, he stated.

“Any delay on part of the government to clear release the subsidy bill means the PSPCL has to take loans. This means that infrastructure upgrade in Punjab, which should be a priority, takes a backseat”, says All-India Power Engineers Federation spokesperson VK Gupta. “It is high time the power subsidy should only go to the needy and a minimum bill is charged to stop wastage of power resources so that consumers who are paying bills get maximum facilities”, he added.