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Power subsidy: savings to go on for those who use less

The Delhi government announced on Monday that it will continue to provide a targetted subsidy to all those who control the consumption of power.

The Delhi government announced on Monday that it will continue to provide a targetted subsidy to all those who control the consumption of power.

Chief Minister Sheila Dikshit,however,was silent on a more crucial subsidy,which ended on May 31 this year. Consumers have already seen a hike in power tariff because of this. The crucial subsidy was announced by the Delhi government in 2005,when a substantial tariff hike was passed that year.

In order to cushion the consumer from that hike,the government decided that it would give a five per cent subsidy to all consumers and discoms would match it. When the subsidy expired on May 31 this year,Dikshit said her government would consider whether the subsidy ought to continue or not. Officials in the Power department confirmed the government has now decided to permanently end that subsidy. While the Delhi government did not make an official statement regarding the reasons for ending this subsidy,officials said it was “due to the paucity of funds.” In the Delhi government’s Budget announced earlier this year,no provision was made for this particular subsidy.

Under this 10 per cent crucial subsidy,all categories of domestic consumers got a reduction of 25 paise per unit for consumption up to 200 units,35 paise per unit for consumption between 201 and 400 units and 55 paise per unit for consumption above 400 units. With the end of this subsidy,consumers have already started noticing a hike in their bills. (see box)

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Under the targetted subsidy,which also expired on May 31,domestic consumers who limit their consumption to 150 units in non-peak months,and to 200 units in peak months will get power at Re 1 per unit. Without this,the rate of power per unit up to the consumption of 200 units is Rs 2.45. The low peak months include February,March,April,September,October,and November. High-demand months are January,May,June,July,August and December.

The targetted subsidy,however,was started in March 2008 by the Delhi government,“to reward consumers who limit their power consumption”. Officials in the Power department said this subsidy has helped convince consumers to shift to legal metered connections.

The government has also decided to continue a subsidy to agricultural consumers who will continue availing power at a subsidised rate of Rs 1.55 per unit.

First published on: 25-08-2009 at 00:37 IST
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