In 25 years, Punjab paid Rs 1.18 lakh crore in power subsidy — nearly half of its total debt

Data of the total subsidy given to various beneficiary sections, available with The Indian Express, has revealed that the subsidy bill that amounted to Rs 604.57 crore in the 1997-98 fiscal, is set to cross the Rs 20,000-crore mark by the end of this fiscal.

The Punjab Government would have to pay the power utility a whopping Rs 22,962 crore towards power subsidy to different categories, which is a record payment to be paid to the power utility by the government.

While the government has estimated that it would end up paying Rs 15,846 crore for power subsidy during the current fiscal, an amount of Rs 7,117.86 crore is due from the previous fiscal.

The government would incur an expenditure of Rs 6,947 crore on granting free electricity in agriculture sector and Rs 2,503 crore for industry sector. The Rs 22,962 crore also includes the 300 free units of electricity for all residents of Punjab.

While Finance Minister Harpal Cheema has been saying that the 300 free units would cost the exchequer an additional Rs 1,800 crore, power experts say that the government would end up paying Rs 3,000 crore as there are several existing categories that get 300 free units, a freebie extended by former Chief Minister Charanjit Singh Channi in 2021.

The subsidy had crossed Rs 1,000 crore mark in 2005-06 fiscal at Rs 1,435 crore for the first time when Captain Amarinder Singh was leading the Congress government. The agriculture subsidy alone was Rs 1,385 crore that year. The total subsidy crossed Rs 2,000 crore mark in 2007-08 when the bill came to Rs 2,848 crore, out of which Rs 2,284 crore was the cost of free farm power. The Shiromani Akali Dal-BJP government led by Parkash Singh Badal was ruling the state during that time.

In 2009-10, the electricity bill went up to Rs 3,144 crore out of which Rs 2,804 crore was in the agriculture sector alone. In the 2011-12 financial year (FY), it was Rs 4,188 crore, and free farm power was Rs 3,879 crore. The next year in 2012-13, the total subsidy was Rs 5,059 crore out of which agriculture subsidy was Rs 4,787 crore.

In 2017-18, when Amarinder took over the reins of the state again, the subsidy bill almost doubled to Rs 11,542 crore. This also included a legacy amount of Rs 2,500 crore left by the previous government. In 2019-20, it touched Rs 15,000 crore mark. During the current fiscal, it would cross the Rs 20,000 mark.

Rajinder Kaur Bhattal introduced a power subsidy for Punjab farmers from January 1997, when she was the CM from November 21, 1996, to February 11, 1997. She had announced free power for farmers having up to seven acres of land. Farmers with larger land share had to pay Rs 50 per horsepower. Later, on February 12, 1997, Parkash Singh Badal took over the reins of the state. He announced a power subsidy for all farmers across the board. In 2002, when Amarinder became the CM, he levied bills on the agriculture motors from October 2002 at the rate of Rs 60 per horsepower citing empty coffers. But he also had to reintroduce free power from November 2005 following a political decision.

When Amarinder again took over as the CM in 2017, he had asked the functionaries to study if he could pay direct benefit transfer of power subsidy to farmers. Meters were installed at a few transformers. But the scheme could not be extended to the entire state.

Now, the ruling AAP government led by Bhagwant Mann has gone a step further by rolling out free 300 units to domestic consumers. Punjab State Power Corporation Limited reports that the power consumption has stayed at 14,000 MW even during non-peak demand. This is expected to skyrocket the power subsidy and bleed the state exchequer further, it said.