Punjab govt power connections to have prepaid smart meters; state’s borrowing limit to go up

According to the letter, the move is in compliance with the circular dated February 7, 2023, and its subsequent amendment of February 14, 2023. In the February 7 circular, the scheme of the installation of prepaid smart meters was introduced for government departments, and on February 14, an amendment was made to the effect that the scheme would not be applicable to government hospitals, street lights, and water works power connections, as they were emergency public services.

As per the latest directions, prepaid metering will be implemented only on one-phase and three-phase whole current smart meters, with sanctioned load up to 7 kW for single-phase connections and 7 kW to 45 kVA for three-phase connections, subject to a maximum load of 100 amperes.

PSPCL has also ordered the rationalisation of electricity connections, stating that only one meter will be permitted per premises or area, including grid stations, subdivision offices, and nearby board offices. All multiple or parallel connections must be removed.

The letter clarifies that since consumer complaints are already handled through the centralised 1912 complaint system, separate electricity connections for different complaint centres or board offices are no longer required.

Smart meters are to be installed strictly outside the premises, on poles or meter boxes, with anti-tampering measures such as polycarbonate seals. Paperless billing will be adopted, making it mandatory for departments to provide updated contact details of nodal officers and drawing and disbursing officers for bill delivery through email and mobile platforms.

Outstanding dues of government departments

According to PSPCL records, nearly 38,000 smart meters had already been installed across various Punjab government departments as of December 31, 2025, but all these meters are currently operating in post-paid mode. As a result, the issue of delayed and non-payment of electricity bills has continued.
Sources within PSPCL indicate that outstanding power dues of Punjab government departments have crossed Rs 2,600 crore, adding to the financial stress on the power utility. Departments such as water supply, local bodies, health and rural development are among the major defaulters. The conversion of existing smart meters into prepaid mode is expected to end this chronic problem by ensuring advance payment for electricity consumption, revealed PSPCL sources.

Why 0.5% of GSDP matters

Punjab’s GSDP for 2024-25 is estimated at around Rs 8.1 lakh crore, while the projected GSDP for 2025-26 is approximately Rs 8.9 lakh crore. Based on these figures:
0.5 per cent of the 2024-25 GSDP works out to roughly Rs 4,000 crore
0.5 per cent of the 2025-26 GSDP comes to up to Rs 4,400–Rs 4,500 crore

This means that by meeting the Centre’s power sector reform conditions, Punjab could gain additional borrowing capacity of over Rs 4,000 crore, over and above its normal borrowing limit.

The Centre had linked this borrowing window to reforms such as pre-paid smart metering, reduction of power distribution losses, improvement in billing efficiency and strengthening the financial position of distribution companies from 2021-22 onwards.

Punjab is already under heavy fiscal stress, with the state’s outstanding debt estimated to cross Rs 4 lakh crore by the end of the 2025-26 financial year.

Against this backdrop, the prepaid smart metering drive is being seen as a reform-driven measure aimed at improving PSPCL’s cash flow, reducing arrears and enhancing the state’s eligibility for additional borrowing, rather than merely a technical upgrade of meters, said PSPCL sources.