The power subsidy to industry at Rs 5 per unit will cost Punjab as much as the annual instalment of farm loan waiver at about Rs 1,500 crore. The benefit to industry, not expected in near future though, was announced by CM Captain Amarinder Singh during the budget session of the Assembly. It was the pre-poll promise of Congress to provide power at Rs 5 per unit to the industry. State’s power subsidy bill for providing free electricity to farmers is about Rs 5,600 crore every year.
The fund-crunched government, having a debt of Rs 2.08 lakh crore (including the guarantees), has already set aside a whopping Rs 10,000 crore towards power subsidy to farmers, which includes arrears of last fiscal not cleared by the previous government.
While the benefit to the industry is yet to be rolled out and no allocation has been made in the budget for the current fiscal, a state official said the government was in the process of formulating its industrial policy and the subsidy would be a part of that. After formulating the policy, the government would write to the power regulatory about its decision on the benefit to be given to the industry. “The total amount, as calculated by, us turns out to be Rs 1,458 crore for supplying power to 5 lakh industrial connections,” said an official. The industry is currently being supplied power at the rate of Rs 5.47 per unit to Rs 6 per unit, depending on its consumption. On each unit, the state charges 13 per cent excise duty, 5 per cent infrastructure development cess and 10 paise octroi.
The official said the government was planning to ensure revenue neutrality in the scheme. With low power prices to the industry, it is expecting the industry to run for more number of hours (during the nights also) and consume more power and fill the gap between demand and supply. “If industry consumes power at night, we will be compensated as we pay a fixed cost for the idle capacity,” the official said. The consumption is maximum at 11,000 mega watt during the four months from June to September in a year. It is the least in December and January, falling to 4,000-5,000 mega watt.