Punjab increases fuel rates, partially scraps power subsidy to boost revenue

The Punjab council of ministers on Thursday announced two major initiatives for raising revenue receipts of the cash-strapped state. The government has increased the prices of retail fuel and also withdrawn the scheme of giving subsidised power to domestic consumers having up to 7 KW load.

The decisions were taken at a meeting of the Punjab Cabinet chaired by Chief Minister Bhagwant Mann here. The prices of petrol have been increased by 61 paise per litre and those of diesel by 92 paise per litre. This will help the state earn an additional Rs 1,500 crore to Rs 1,700 crore per annum.

The government, which is under fiscal stress and found it “challenging” to even meet its committed liabilities for the month of August, delaying the release of salaries and pensions by four days, has taken these steps to keep the fiscal system going.

It has also been decided to withdraw the scheme of giving subsidised power (at Rs 2.50 per unit) to domestic consumers having upto 7 KW of load. The scheme was announced by the previous Congress government when Charanjit Channi was the chief minister.

Announcing this, Finance Minister Harpal Cheema said the AAP government would continue giving 300 units of free power per month to domestic consumers. “But some consumers were getting dual subsidy. We have decided to abolish this. In doing so, the state will save Rs 392 crore per annum,” he said.

In the past one month, considering the rapidly “deteriorating fiscal health” of the state, the AAP government has increased the collector rate for registration of property and also increased the motor vehicle tax on two-wheelers and four-wheelers.

The council of ministers also discussed the draft agriculture policy, especially in light of the fast-depleting groundwater level in the state. This will now be discussed with representatives of BKU Ekta Ugrahan and Punjab Khet Mazdoor Manch when they meet Chief Minister Mann later in the afternoon.