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This is an archive article published on December 6, 2014

Mumbai: Subsidy on power to go

Fadnavis says new financial model for utilities will make electricity cheaper.

THE Maharashtra government has decided to withdraw the subsidy given to electricity consumers who use less than 300 units per month — a move that will help save the government Rs 706 crore but lead to higher power bills for consumers across the state, barring Mumbai.
Announcing this Friday, Chief Minister Devendra Fadnavis said he had directed power companies to follow a new accounting model that would help them save on the tax on profits.

By adopting this model and through increased use of alternate sources of power in the next couple of years, the state government hopes the per unit cost of power could be lower by Re 1 per unit.

The previous Congress-NCP government had announced a 20 per cent rebate for power consumers in the run-up to the Lok Sabha elections.

The government then earmarked Rs 706 crore every month for this subsidy. Up against the challenge of reining in the state’s huge revenue deficit of Rs 20,000 crore, the BJP-led government is now looking to adopt fiscally prudent measures.

Senior state government officials had advised the state government to withdraw this subsidy.

“As of now, the subsidy is almost gone,” Fadnavis said, adding: “The government is now working on a model which will ensure lower cost of power in the next few years.”

The CM said they took a look at the financial position of power companies and realised that the high profits that they were reporting led to higher taxes.

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“We have told them to use better accounting principles that will reduce their tax liability. This money can be ploughed back to reduce the cost of power,” he said.

The government is also hopeful that over the next two years, with increased sourcing of solar power and other alternate sources, the per unit cost of power can be reduced. “By using these models, we can reduce the per unit cost by as much as Re 1,” said Fadnavis.

Zeeshan Shaikh is the Associate Editor who heads The Indian Express' Mumbai reporting team. He is recognized for his highly specialized Expertise in analyzing the complex dynamics of Maharashtra politics and critical minority issues, providing in-depth, nuanced, and Trustworthy reports. Expertise  Senior Editorial Role: As an Associate Editor leading the Mumbai reporting team, Zeeshan Shaikh holds a position of significant Authority and journalistic responsibility at a leading national newspaper. Core Specialization: His reporting focuses intensely on two interconnected, high-impact areas: Maharashtra Politics & Urban Power Structures: Provides deep-dive analyses into political strategies, municipal elections (e.g., BMC polls), the history of alliances (e.g., Shiv Sena's shifting partners), and the changing demographics that influence civic power in Mumbai. Minority Issues and Socio-Political Trends: Excels in coverage of the Muslim community's representation in power, demographic shifts, socio-economic challenges, and the historical context of sensitive political and cultural issues (e.g., the 'Vande Mataram' debate's roots in the BMC). Investigative Depth: His articles frequently delve into the historical roots and contemporary consequences of major events, ranging from the rise of extremist groups in specific villages (e.g., Borivali-Padgha) to the long-term collapse of established political parties (e.g., Congress in Mumbai). Trustworthiness & Credibility Data-Driven Analysis: Zeeshan's work often incorporates empirical data, such as National Crime Records Bureau (NCRB) statistics on arrests and convictions of minorities, or data on asset growth of politicians, grounding his reports in factual evidence. Focus on Hinterland Issues: While based in Mumbai, he maintains a wide lens, covering issues affecting the state's hinterlands, including water crises, infrastructure delays, and the plight of marginalized communities (e.g., manual scavengers). Institutional Affiliation: His senior position at The Indian Express—a publication known for its tradition of rigorous political and investigative journalism—underscores the high level of editorial vetting and Trustworthiness of his reports. He tweets @zeeshansahafi ... Read More

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