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Home News Power Sector News PSEB in trouble - Punjab Govt. has no funds to clear power subsidy dues

PSEB in trouble - Punjab Govt. has no funds to clear power subsidy dues

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PunjabEven as the Punjab government has agreed to provide relief to other categories of consumers besides farmers from the recent power tariff hike, it has been consistently defaulting in payment subsidy for free power to farmers and SCs and BPL families.The total default figure on power subsidy has reached Rs 1,038 crore with the government failing to pay monthly subsidy of Rs 294 crore for three consecutive months and making short payment of Rs 216 crore for two previous ones after the new tariff order was announced in September.

Worse, there seems to be no hope for the beleaguered Punjab State Electricity Board (PSEB). The finance department says it has no money to bail the board out. Hinting that there could be further delay in payment of subsidy to the board, a department official said, “We are trying very hard not to default on salary, pension and interest payments. But the department has no money to clear subsidy dues right now.”But as dues are piling up, so are woes of the cash-starved PSEB.

The board has not been able to clear bills for power purchased from National Thermal Power Corporation (NTPC) and National Hydropower Corporation (NHPC) and other suppliers to the tune of over Rs 150 crore thereby losing the rebate it gets for timely payment.

Though the power department has written to the finance department for release of subsidy amount, the latter has not sanctioned funds so far. “Power subsidy of nearly Rs 300 crore per month from the government is an important part of our revenue.

No money has come from the government for the last three months and if we do not receive it this month, we will face problems even in payment of salaries,” said a PSEB official.

The decision of power tariff rollback taken by the Punjab government last week may not be the final word on the issue. The government or the PSEB, on behalf of the government, will have to file a petition before the Punjab State Electricity Regulatory Commission (PSERC) to express their commitment to compensate the power board for the tariff hike through additional subsidy. It is only after the commission is satisfied that the board’s financial interests will not be compromised, that it will allow the rollback, said sources in the commission. Earlier in 2007, the regulator had imposed a fine on the PSEB for unilaterally allowing a rollback without its concurrence.

Source - Indian Express

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