There was no confrontation between the Punjab government and the Punjab State Electricity Regulatory Commission (PSERC) on the issue of payment of subsidy arrears of Rs 1,361.66 crore in lieu of free power to farm sector and poor.
Namita Sekhon, secretary, PSERC said, “Commission had done its constitutional and legal duty by asking the Punjab government to clear outstanding subsidy arrears before March 1.” She said the Electricity Act 2003 makes it clear that the state governments must pay advance subsidies on the pattern as framed by the commission.
It was the PSERC that had issued an order on February 15 on the petition of PSEB Engineers Association directing the Punjab government to clear all outstanding subsidy arrears by March 1 or else the PSEB would issue electricity bills to those sections to which the government was providing free power. In response to the petition, the Punjab government had offered to clear “maximum amount by March 31”. Sources in the Punjab government said out of the remaining subsidy of Rs 1,361.66 crore, the state government has released a subsidy of Rs 195 crore after the decision of the regulator.
However, the PSERC issued directions to the Punjab government that “as per Section 65 of the Act which provides if the state government requires the grant of subsidy in the tariff determined by the commission under Section 62 to any class of consumers, the state would in that eventuality pay in advance and in such manner as may be specified by the commission the amount required to compensate the person effected by the grant of subsidy. In the event of subsidy not being paid in accordance with the above provisions of the Act, tariff as fixed by the commission would become applicable”.
This led to talks in the corridors of power that a confrontation was brewing between the Punjab government and the electricity regulator.
Advocate General, Punjab, H.S.Mattewal when contacted observed that “there was no question of any confrontation as it was the right of the Commission was a Constitutional body which had given its decision and it was the right of the government to go in for an Appeal before the Appellate Authority”. The State Advocate General said that “Punjab Government has decided to file an Appeal against the decision of the Commission in next three four days. However, government sources say that the appellate tribunal cannot ask the PSEB to supply free power to farmers and other sections of society without charging the subsidy bill from the state .In fact, there is a possibility of the appellate tribunal passing more strong order against the non-clearance of subsidy dues by the state government. He said that
The Advocate General said that “We are working for the welfare of the people and Punjab was welfare state”. PSEB sources, however, say that the appeal before the Tribunal would only delay the clearance of outstanding arrears and as a result the PSEB would suffer. For record, the 49 year old PSEB that would celebrate its Golden Jubilee next year is in deep financial crisis with mounting burden of loans and generation of about 6000 MW falling much short of peak load requirements of about 9000 MW in Punjab. Significantly PSEB which was the first Power Board in the country to electrify all villages in a state way back in 1976 and to ensure providing electricity to 90 per cent of the households as against the National average of 43 per cent. Till early 1990’s, the PSEB was in profit. However, it was in 1997 when the state government started providing free power to farm sector that problems for the Board began.