Punjab: Increase in domestic electricity subsidy bill affects financial condition

Punjab: The provision of free electricity to domestic consumers in Punjab is putting a lot of pressure on the state government and the Punjab State Power Corporation Limited (PSPCL). Currently, 79.90 lakh domestic consumers are availing 300 units of free electricity per month, with many households having dual connections, further increasing the financial burden. Domestic electricity subsidies have been expanding since the Aam Aadmi Party (AAP) government launched the free electricity scheme in 2022, with the figure estimated to reach Rs 8,785 crore by the end of the current fiscal year. This represents a significant increase from Rs 5,739 crore in 2022-23 and Rs 7,234 crore in 2023-24. The rising subsidies are second only to the agriculture sector, which is estimated to receive Rs 10,175 crore as subsidies. The energy audit report for the first quarter of 2024-25 shows that the number of domestic consumers has increased by 6 lakh in two years, mainly due to the splitting and trifurcation of electricity meters and new connections. PSPCL data also shows that 90% of domestic consumers received free electricity by December 2023, and the number of zero bills is steadily increasing. Domestic electricity consumption increased from 14,538 million units in 2021-22 to 17,510 million units in 2022-23, a 20% increase since the introduction of the free electricity scheme. PSPCL has projected a further 17% increase in consumption, reaching 20,348 million units in 2024-25. The total subsidy bill for FY 2024-25 is estimated to be Rs 21,909 crore, including Rs 10,175 crore for agricultural consumers, Rs 8,785 crore for domestic categories and Rs 2,949 crore for industrial consumers. Amid these rising costs, the PSEB Engineers Association has suggested reforms including limiting subsidies for income tax payers and public service employees and limiting the subsidy to one connection per household. They have also recommended that consumers caught stealing electricity be denied subsidies for five years.