Subsidising electricity, Populism will cripple power board

In another act of irresponsible governance, the Punjab government has decided to absorb the power tariff hike announced for the domestic, industrial and commercial consumers by the regulatory commission in August last year. This will set the state back by Rs 550 crore. The cash-strapped government is already placed at the edge of a precipice because of its financial mismanagement and the nasty politics of competitive populism in which both coalition partners excel. The Akalis insist on free power for farmers and the BJP resists any attempt to further burden the urban consumers, letting the power board bleed itself to death in the process.

The government has a right to help the needy. But in this case it is bent upon bankrupting the state power board because it is not paying the monthly subsidy in time as legally required. The government has defaulted on subsidy payments for the past three months forcing the regulatory commission to threaten a penalty. The coalition government recently set up a two-member committee to review the ruinous power subsidy that costs the exchequer Rs 3,142 crore annually. That turned out to be an exercise in futility. Hoping to calm the squabbling ruling politicians and hoodwink the public, the Punjab State Electricity Board approached the regulator to defer the tariff hike, which was to its own advantage. In the process the board showcased its monumental legal ignorance and the regulator rightly rubbished the plea.
If the ruling Akali Dal thinks it is helping farmers or the BJP feels it is protecting the urban consumers’ or the industry’s interests, both are mistaken. The sparring coalition partners might have bought political peace but they have pushed the power board closer to a financial disaster. A cash-starved board, helped by a suicidal management, will only sink deeper in trouble and people will suffer more frequent and prolonged power disruptions.

Source: The Tribune, Chandigarh, India.

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