The Rajasthan Electricity Regulatory Commission (RERC) announced revised power tariffs in different consumer categories, permitting discoms to increase domestic electricity charges by around 16% (85 paise per unit) and for non-domestic sector by around 19%. The average increase for all categories was 16.89%. The fixed charges too were increased for all categories - the hike ranging between Rs 20 and Rs 50 per connection per month.
The revised tariffs would lead to an overall increase in revenue by Rs 4,498 crore for financial year 2014-15, leaving a deficit of Rs 334 crore. Since the revised tariffs are proposed to be made effective from February 1, 2015, the increase in the revenue for the balance period of the current financial year will be Rs 750 crore. The assessed overall net deficit would be Rs 4082 crore for all discoms.
Soon after the new tariff rates were announced, the opposition Congress accused the BJP of falling back on electoral promises. Former chief minister Ashok Gehlot said, "BJP had made price rise an election issue to come to power. It has, however, cheated people by first cutting subsidy on LPG cylinders,increasing VAT on petrol and now by raising electricity prices."
PCC chief Sachin Pilot too said the government's failure to check power thefts and distribution losses was putting burden on consumers.
The Vasundhara Raje government defended the revised rates saying it was committed to an annual hike as part of a financial reforms package approved by the cabinet on October 19, 2011 (Gehlot government) after banks and financial institutions stopped giving loans to state's loss-incurring Discoms.
The then Central government too had notified the Discoms a financial restructuring plan, which mandated annual increase in tariffs.
The rates were, as such, revised in 2012-13 and 2013-14 also. Even after the latest revision, Rajasthan's rates were still behind many other states' power tariffs.
The revision of power tariffs was long overdue but the ruling BJP government had been pushing it to escape public backlash in view of series of elections that were held in 2014-15. The revision was first expected in September last. The municipal elections in November and the panchayat elections in January this year, however, impelled the Raje-government to hold back the exercise until now.
The Jaipur, Ajmer and Jodhpur discoms had filed petitions before the RERC for determination of annual revenue requirement (ARR) and tariff for FY 2014-15, following which the revisions were made. The tariff for FY 2013-14 was revised by the Commission in June 2013.
The Commission now increased power tariff for agricultural sector and small, medium and large-scale industries too. The state government, however, later clarified that agriculture consumers would continue getting the subsidy. However, the flat rate consumers would stop getting subsidy after six months if they do not get their connections changed to metered category.