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C. Shivkumar

Bangalore , Dec. 5

THE Karnataka Government has failed to rein in power subsidies and this year's estimates are expected to see a major slippage in achieving the targets.

State Government sources said here that one of the major factors contributing to this slippage is conforming to the subsidy targets, especially power sector subsidies.

Power sector subsidies allocated for the current fiscal are Rs 2,065 crore.

However, sources said that achieving the target was difficult in view of the slippages in revenue receipts of the State-owned Karnataka Power Transmission Corporation Ltd (KPTCL). This had happened last year also. For the fiscal year 2002-03, the budgeted estimates on power subsidies was Rs 2,339 crore. The revised estimates were at least Rs 200 crore higher and the actuals for the year were closer to about Rs 2,800 crore.

The sources said KPTCL's realisations still continued to be on the low side. The deficit between billing and actual realisation was in the region of about 55 per cent. This implied that the utility was not in a position to realise almost 45 per cent of the revenues due to it. Besides, the sources said that power purchase costs for the project has also been on the rise during the last few months, offsetting the advantages of increased power purchases from high cost sources and as a result of shortfalls in hydel availability. These shortfalls, sources said, had to be substituted with increased supplies from liquid fuelled sources, central and other purchases.

To cap it all, the utility still has not been fully able to effectively bring down transmission and distribution losses. The effect transmission and distribution losses are currently in the region of about 35 per cent and the norm permitted by the State electricity supply regulator is 28 per cent. To partly offset this shortfall, the utility had sought increases in power tariffs on some categories of consumers and imposition of a cess on captive power generating stations.

However, the State Government has resisted KPTCL's attempts to carry out physical audits on assessing the agricultural load in the State. Instead, the softer option of regularising agricultural pump sets has been adopted. Sources said that once this audit is conducted, the actual subsidy on agricultural pump sets would be known. Estimates are that at least 20 per cent of the revenue leakages on this count could be stemmed and allow for reducing the subsidy bill of the Government.

In the absence of these physical audits, the option was to sustain a high level of subsidies, sources said.

The sources said that, in addition, the Government was also faced with a revenue shortfall especially tax revenues. The State Government has managed to realise only about 49 per cent of the gross tax revenue of Rs 12,588 crore. Similarly, non-tax revenue realisation was only about 10 per cent of the target for the year, which was about Rs 1713. These receipts included disinvestment from at least one of the distribution companies created, though this is unlikely to materialise during the current fiscal, sources said

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