OLD SCHOOL POPULISM Taking the subsidy route

The biggest point of connect with voters before the election, AAP promised a cut in inflated prices of water and electricity by cleaning up the system. While its manifesto spoke of auditing discoms, rectifying inflated bills and getting faulty meters checked, two days after forming the government, AAP announced a flat 50 per cent cut for households that consume up to 400 units a day and free water for households that consume up to 670 litres a day. Both moves came at the cost of unprecedented subsidies, up to Rs 4,000 crore for power and Rs 162 crore for water over five years. The development budget for Delhi in 2013 was about 14,000 crore.

The demand for an audit of power companies in Delhi was previously carried out by the decidedly upper middle class residents welfare associations in Delhi. While much of the evidence gathered by Kejriwal against the power companies drew from this campaign, the decision to go with subsidies changed this equation as it traded systemic change for old-school populism. “This was a move intended to tell the poorer sections of Delhi that they would no longer have limited access to utilities,” says a senior AAP leader.

As expected, the free water and cheaper electricity schemes were hugely successful among the lower middle class. However, by introducing slab-based subsidies, Kejriwal probably alienated sections of the upper middle class who do not stand to benefit from a subsidy that is linked to consumption. An average south Delhi household consumes up to 600-800 units of power and 240 litres of water per person per day in the summer months.