PSPCL awaits subsidy, lives on loans

Patiala, May 18: The cash-strapped state government is finding it difficult to clear the pending subsidy bill accumulating for the past many months, despite assuring the regulator to clear the same.

With the rising expenditure against power subsidy and the government’s failure to clear pending power subsidy, the PSPCL has been forced to take loans to clear salaries and pension. As per the budget proposal, the subsidy amount is Rs 10,252 crore for 2017-18.

The subsidy due as per sanction up to March 2018 was over Rs 10,000 crore, while the net outstanding was roughly Rs 4,000 crore. Sources confirm that many expansion and development works to be undertaken by the PSPCL have been stayed due to shortage of funds.

“Despite assurance, the government has failed to clear Rs 7,696 crore subsidy,” said retired engineer Gurnek Brar, who has also filed a petition before the Punjab State Electricity Regulatory Commission (PSERC).“The government has violated the provisions under Section 65 of the Electricity Act by not fulfilling its guarantee for the past four years.

It still owes Rs 4,964.33 crore to the PSPCL. Thus, giving guarantee for this year’s subsidy could be challenged by the PSERC,” says Brar. The subsidy bill has swelled to Rs 13,718 crore, of which Rs 8,949 crore is subsidy for 2018-19, with the remaining being the arrears of non-payment of subsidy over the past three years.

Recently, the Centre for Research in Rural and Industrial Development (CRRID) found that 81.5 per cent of free power goes to big farmers.The state government had to pay Rs 4,964 crore from the pending subsidy amount of 2017-18, then only the subsidy of 2018-19 would have been allowed.

However, they have failed to clear the subsidy of April and May that calls for strict action, said experts in the power sector. Last month, the PSPCL decided to take Rs 1,000 crore loans, as the outstanding payments had piled up to Rs 800 crore.

As the state government failed to pay the monthly installment, the regulator imposed 9.36 per cent interest on delayed payment. A Venu Prasad, PSPCL Chairman-cum-Managing Director, said, “The state government has released Rs 500 crore as adjustments against subsidy and the condition is getting better.

“The electricity duty levied on consumers has also been released to us as it is collected by us and the government has given a nod to use the same,” he said, adding that the government has assured that the pending subsidy amount would be cleared soon.

Source Tribune India