The Tamil Nadu Government will shell out Rs 4,024.96 crore as subsidy compensation to the State power utility in 2012-13.
According to an official press release, the subsidy compensation to the Tamil Nadu Generation & Distribution Corporation Ltd, the power utility, is to off set the losses it suffers for charging consumers a lower tariff than that fixed by the electricity regulator.
The Electricity Act 2003 makes it mandatory for State Governments to pay the subsidy in advance.
Compensation
In 2011-12, the subsidy compensation was pegged at Rs 2,071.41 crore.
The compensation is fixed by the Tamil Nadu Electricity Regulatory Commission which also fixes the power tariff, said the release from the Commission.
Subsidised power
Major segments of the domestic consumers get subsidised power.
The subsidy ranges from Re 1 a unit to Rs 1.60. Hut dwellers and agriculturists are supplied free power.
Nearly half the subsidy, about Rs 1,971.71 crore is subsidy compensation for free power supply for agriculture; about 44 per cent, Rs 1,767.72 crore is to off set the losses due to selling cheap power to domestic users; and the balance 7 per cent, Rs 285 crore, for subsidised power to hut dwellers, weavers and places of worship.