₹8,500cr power subsidy bill in state, arrears 5 times higher

Maharashtra has an annual subsidy bill of Rs 8,500 crore in the power sector.

- Somit.Sen

Mumbai: But what is worrying for state-run power distributor MSEDCL is that bill arrears of “subsidised consumers” has gone up to nearly five times this amount. Outstanding dues stand at over Rs 42,000 crore, and they are mainly owed by farmers, an official told TOI.

A combination of factors ranging from votebank politics to the need for incentivising both agriculture and industry prevents the state from enforcing better compliance. Even though mounting dues stall much-needed investments in infrastructure and create a deficit in power supply, officials say subsidies are not likely to be phased out any time soon.

In Maharashtra, around Rs 5,500 crore is given as subsidy to farmers, whose monthly power tariff is 80% less than that of a residential consumer. “Over 45 lakh agriculture consumers benefit from this subsidised tariff which is as low as Rs 1.50 per unit compared to actual cost of supply which would be Rs 7.34 per unit,” said an official. But arrears are mounting and recovery has become a major challenge for the government.