The Hindu Business Line : 6 SEBs spend Rs 4,014 cr on free, subsidised power

Even as the financial condition of the power sector of States gets bad to worse, the profligacy of the State Electricity Boards (SEBs) continue at the expense of the taxpayer.

Six SEBs that are offering free or subsidised power to consumers, mainly to the agricultural sector users, spend a whopping Rs 4,014 crore annually to supply under-cost power supply schemes with minimal returns, according to data compiled by the Power Ministry.

Punjab, Tamil Nadu and Andhra Pradesh, which continue to offer free power to several categories of agricultural consumers, spend nearly Rs 3,600 crore on free or subsidised power schemes. Karnataka, Kerala and Madhya Pradesh make up the list of States providing subsidised power to various categories of consumers.

This comes even as the Centre has reiterated the need for States to disconnect their free power policy and the Prime Minister, Dr Manmohan Singh, has stated on record that the free power concept was a big hurdle in efforts to improve the precarious state of the country's power sector. According to Power Ministry officials, the problem with such subsidy schemes in most States is that they are poorly targeted and the SEBs end up attributing much of their actual technical and commercial losses to these subsidy schemes.

Punjab, which has among the richest farmers in the country, spends Rs 1,548 crore annually on supplying free or subsidised power to agricultural pump set consumers and certain categories of domestic consumers. The Punjab Government, last September, went on to announce a free power scheme to all farmers who cleared their bills payable till August 31. For free power alone, the State pays around Rs 700 crore.

Tamil Nadu incurs an estimated expenditure of Rs 1,166 crore annually on subsidised power to agricultural and hut categories and a portion of tariff for the domestic category. Andhra Pradesh spends about Rs 877.58 crore on free or subsidised power to some categories of farmers.

Madhya Pradesh spends about 204.04 crore on subsidised power supply to agricultural consumers, mainly for SC and ST consumers. Kerala spends Rs 102.35 crore on cheap power to domestic load up to 500 watts with monthly consumption of up to 20 units. Karnataka spends annually Rs 112.18 crore on subsidised power supply to economically weaker sections under the Bhagya Jyoti and Kutir Jyoti schemes where electricity consumption of up to 18 units per month is subsidised.