Govt blames GST, previous regime for 75,000 cr it owes to PSPCL for free power

April 09, 2018 03:02 PM

CHANDIGARH: The state government has passed on the buck for its failure to pay Rs 5,000 crore that it owes to the Punjab State Power Corporation Limited (PSPCL) as subsidy payment, on account of free power supplied to agriculture, to the introduction of the Goods and Services Tax (GST). In an affidavit filed before the sector regulator, the Punjab State Electricity Regulatory Commission (PSERC), filed on April 2, additional chief secretary Satish Chandra has said there was a major disruption of revenue due to the GST. It added that the government was also paying an additional Rs 3,000 crore a year on food loan account too and that it was saddled with a Rs 31,000-crore loan that the previous SAD-BJP regime had taken near the end of its tenure. The PSERC is hearing a petition challenging the delay in release of subsidy in lieu of free supply to the farm sector and other sections that retired PSPCL engineer Padamjit Singh has filed. The government has sought more time to pay the subsidy.

Keeping payment pending violates Electricity Act. The government, in a letter to the regulator, has reiterated its commitment to give payment to the PSPCL. However, it has already violated section 65 of the Electricity Act, 2003, according to which advance payment must be made in lieu of free power. The fiscal 2017-18 is the second successive year when the Punjab government has defaulted in payment of subsidy to the PSPCL. The government had calculated Rs 11,542 crore as subsidy payable for 2017-18. However, the total subsidy it gave to the PSPCL was Rs 6578 crore, a shortfall of Rs 4,965 crore.

“In 2016-17, the pending subsidy was Rs 2,500 crore. Over the past year, it doubled to Rs 5,000 crore. In this new fiscal, the bill will reach Rs 12,500 crore. This means that the Punjab government has to pay Rs 1,000 crore each month. This looks impossible. Thus, I have moved the power regulator to ensure the payment of subsidy before the new tariff in announced,” said Padamjit, the petitioner. “This shortfall in subsidy payment is a gross violation of Section 65 of Electricity Act, 2003, on the part of the state government,” he added. “Freebies cannot prevail over law,” he said, adding that there was evidence that the state government has, year after year, failed in its commitment to pay subsidy.

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