In quarter 1, state gives only 40% of power subsidy to PSPCL

PATIALA:The Punjab government continues to default on power subsidy payments to the Punjab State Power Corporation Limited (PSPCL), even after giving an undertaking to the power regulator that it will pay this in advance.

For the first quarter of this fiscal, against the required amount of ₹3,430 crore, the PSPCL has received only ₹1,352 crore (around 40%).

Functioning with a subsidy shortfall of around ₹2,077 crore, the PSPCL is being forced to arrange loans to meet day-to-day requirement of cash. “In the first two months, the amount paid was negligible. In June, against the required amount of ₹1,144 crore, the actual receipt was ₹614 crore which is 54%; the default was ₹530 crore,” said a PSPCL official.

He added that the management had taken up the matter with the government, to no avail.

“The government cites its financial crunch for non-release of subsidy. Summers are at peak, and we have to spend on buying coal and power. We face a cash crunch. These are hard times. Consequently, we have also defaulted on payments to power suppliers and other contractors,” said an official, not wishing to be named.

PAYMENT DEFAULT ON FOR THREE YEARS

Significantly, the government has been defaulting on payment for three years. The power regulator calculated ₹13,712 as subsidy for 2018-19, This includes arrears of the past two years of around ₹4,000 crore.

On June 5, the power regulator had directed, “Financial distress in the power distribution utility adversely affects consumers in the state. The commission has directed in its tariff order that the arrears of subsidy and subsidy due in 2018-19, as per the government’s commitment be paid in advance monthly instalments,” and ...“if the government fails to do so, the PSPCL is free to charge subsidy from consumers”.

Retired chief engineer Padamjit Singh, who had filed the petition that led to this direction of the regulator, told HT, “These directions and statements are true and operative even now. It is seen that instead of covering up the subsidy default of April, May in June, the government defaulted again. This is gross contempt of Sec 65 of the Electricity Act 2003 as well as the orders of the regulator.” He added that if the Punjab government did not follow the orders, he would move the high court.

PSPCL chairman-and-managing director Baldev Singh Sran could not be contacted for comment. However, his office said he had taken up the matter of early release of subsidy arrears with the chief secretary and the finance department.

AGAINST THE REQUIRED AMOUNT OF ₹3,430 CR, THE PSPCL HAS RECEIVED ONLY ₹1,352 CR (40%).