MP, Rajasthan, Karnataka Lead In Power Subsidies

According to data provided by the Power Ministry, subsidised electricity is being supplied to consumers in 27 states and Union territories. Further, as much as Rs 1.32 trillion (Rs 132,000 crores) in subsidies has been spent in the country in the financial year, 2020-21 financial year. Among all the states, Madhya Pradesh, Rajasthan and Karnataka top the list of states that provide the highest of power subsidies. Together, the three states account for power subsidies worth ₹48,248 crore- that is, 36.4%.

Madhya Pradesh

Between 2018-19 and 2020-21, the state has made an expenditure of ₹47,932 crore. This, however, is set to witness a rise further, given that the the state government has revealed setting aside an additional ₹16,424 crore in the form of power subsidies to farmers. As far as the domestic consumers are concerned, the state has allocated a subsidy scheme worth ₹5,582 crore. 

Rajasthan 

Rajasthan had declared an additional free electricity of up to 50 units for domestic users who consume up to 100 units every month in the 2022-23 budget. The state has expended ₹40,278 crore in the last three years and another ₹6,545 crore in 2020-21 towards power subsidies. Cabinet minister Pratap Singh Khachariyawas had shared that 36 lakh beneficiaries would gain from the free electricity. 

Karnataka 

Karnataka is constantly ramping up efforts to provide power subsidies, especially to farmers.

Recently, the state government announced giving power subsidies to coffee growers for pump sets up to 10 HP.

Under Rashtriya Krishi Vikas Yojana (RKVY), the Farm Mechanisation Scheme makes the provision to provide 50 percent of the cost in the form of subsidy for the purchase of farm implements priced under Rs. 5.00 lakhs, while 40 percent subsidy is provided if the cost exceeds the said amount. In another major move announced this year, the state government said that it would provide free electricity of up to 75 units each month to all rural SC/ST households below the poverty line.

Under the Soura Gruha Yojana introduced in 2019, consumers can avail 40% subsidy for up to three kilowatts of solar panel installation. 20% is subsidy is provided for above 3 kW of this installation. Though ambitious, the scheme has failed to create impact, mostly because of delays in approval of applications by BESCOM (Bangalore Electricity Company).

Subsidies in Other States 

In Delhi, consumers using up to 200 units of electricity in a month are eligible for 100 per cent subsidy.

Other states are witnessing a rise in power subsidies too. Punjab, where the Aam Aadmi Party recently came to power on a plank of upto 300 units of free power for every user, might have joined the bandwagon but for the precarious finances of the state. In Manipur on the other hand, in a span of just three years, the state power subsidies have seen a 124 per cent hike from from ₹120 crore to ₹269 crore.

Goa and Kerala are the newest states that The data also showed that Goa and Kerala are the newest to offer power subsidies in 2020-21. Sikkim and Tripura, on the other hand, begun to do so back in 2019-20.

The rising trend forced the Prime Minister Narendra Modi to call out to states to avoid subsidies, pointing out to the pressure it has created in the power sector at a time when there is critical need to invest in upgradations and fresh capacities.