The Punjab government has decided to defer the power tariff hike, putting an additional burden of about Rs 1,296 crore on the already debt-ridden state.
For the record, the annual subsidy on account of free power to the farm sector and certain other segments comes to around Rs 3,100 crore. Then, there is the highly subsidised “atta dal scheme” of the state government that puts an additional Rs 500 crore burden on the state every year. Add other freebies and the total burden on the government comes to about Rs 6,500 crore for a state whose annual plan is of the size of about Rs 8,625 crore.
Adding to the state’s woes, the cumulative debt burden on the state has risen from Rs 57,726 crore in 2008-09 to Rs 63,217 crore in 2009-10. Little wonder, the deficit of the state and gap between resource mobilisation and expenditure have shown a large mismatch in the recent years.
Ironically in such a fiscal situation, the state government has decided to defer the recent hike of about 12.5% overall and about 17.5% in the case of domestic users announced by the Punjab State Electricity Regulatory Commission. However, in view of the order on the revision of rates, the power bills will be issued as per the new tariff. The state government will approach the regulator to allow it to subsidise the enhanced portion of the new bills.
These decisions follow a meeting of the SAD-BJP co-ordination committee chaired by chief minister Parkash Singh Badal. Media advisor Harcharan Bains told FE here on Tuesday that the state government has set up a two-member committee comprising deputy chief minister Sukhbir Singh Badal and minister for local bodies, Manoranjan Kalia to go into the entire area of resource mobilisation and fiscal discipline in the state. The committee will submit its report in a month.
Talking to FE, HS Bedi, president, Punjab State Electricity Board Engineers Association, said, “The Engineers Association is apprehensive whether the state government would be able to give the additional subsidy of Rs 1,296 crore plus the subsidy of about Rs 3,100 crore in lieu of free power to the farm sector and some other sectors.” Bedi said, “In the past too, the state government had promised subsidy when tariff had been rolled back but it had only done some paper transfers. If the Punjab government fails to clear the subsidy amount to PSEB, it would sound a death knell for the board.”
The four-member high-powered committee had been formed to look into the saffron party?s demand to roll back the power tariff hike imposed on domestic, commercial and industrial consumers by the State Regulatory Commission recently.
Following a two and a half hour meeting, the alliance coordination committee formed a panel comprising deputy chief minister Sukhbir Singh Badal, industries minister Manoranjan Kalia, veteran BJP leader Balramji Das Tandon and SAD secretary-general Sukhdev Singh Dhindsa. The panel has been asked to collect additional funds for the PSEB besides looking at further resource mobilisation to improve financial health of the state.