Payment of free farm power bill worth over Rs 5,000 crore by the state government to the Punjab State Power Corporation Limited (PSPCL) is hanging fire with state’s Finance Department citing its inability to clear the bill immediately due to Centre’s new rule on borrowing.
During last fiscal, the state had defaulted on paying Rs 4500 crore to the power utility, failing which the regulator (Punjab State Electricity Regulatory Commission) had levied an interest of over Rs 750 crore on the PSPCL. The interest levied was thus passed on to the consumers in the form of recent power hike. If it continues even this year, the amount of interest will go higher.
The Finance Department has clearly refused to clear the dues citing a diktat by Union Ministry of Finance fixing a monthly borrowing limit on all states. Earlier, the states were allowed a quarterly borrowing limit, but before Lok Sabha election the states, allowed to borrow three per cent of their GDP, were told to stagger the total borrowing amount in 12 equal parts.
Punjab is allowed a borrowing of Rs 17,000 crore. As per the latest rule, it can borrow only Rs 1415 crore every month while earlier it could borrow Rs 4250 crore in every quarter of the year. “This has spelt doom for us. Sometimes, we do no need to borrow in a month but at others we need more money in the next month. The diktat has spoiled our system,” said Finance Minister Manpreet Singh Badal.
He added that the department was able to pay only Rs 300 crore to Power department as it did not have access to funds.
Manpreet said that he, along with FMs of other states, is scheduled to meet Union Finance Minister Nirmala Sitharaman on June 21 and take up the issue. “If we are allowed a quarterly borrowing limit, we should be able to pay a substantial amount towards farm power subsidy by July 1,” he said.
Punjab gives free power to farmers in the state and has a bill of about Rs 10,000 crore every year. The issue has come up when Power Department’s minister Navjot Singh Sidhu is yet to assume charge. While the file regarding farm subsidy bill does not require Power Minister’s signatures, but a department official said: “If nothing else, a minister like Sidhu can make a lot of noise. He could have taken up these issues.”
Meanwhile, stalemate continues between Sidhu and Chief Minister Amarinder Singh, after the latter changed former’s portfolio from local bodies to power. There seems to be no solution in sight on the issue. Amarinder also postponed his Delhi visit and is likely to go next week only.