Free power will lead to collapse of system: Union Minister

Says out of Rs 6.5 L cr turnover, Rs 1.5 lakh cr goes to subsidy scheme

Slamming political parties for offering free electricity to consumers as poll promises, Union Power Minister RK Singh on Thursday said giving free electricity to consumers would lead to misuse and collapse of the system.

“Giving subsidies in electricity tariff to the poor is understandable. I have no problem with it. However, by giving free power to all means it will encourage the public’s carelessness about electricity and collapse of the entire power system (sic),” Singh told the media here.

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“Result of free electricity to farmers in Punjab now we can see. Not only over-exploitation of groundwater but also fertile agricultural land turned waste due to flooding of water (sic),” he said. “The states which provide free power take huge loans to buy power from electricity generating companies. To clear legacy loans, again they take fresh loans and pay high interest,” he said.

He said out of the total Rs 6.5 lakh crore turnover in the power sector in a year in the country, a total of Rs 1.5 lakh crore goes to the electricity subsidy scheme, he said.

Due to tight norms adopted by the Centre, many states are now clearing their dues to power utilities including electricity distribution companies. “Against legacy dues of Rs 1,39,747 crore as on June 3, 2022, 13 states/ UTs have paid instalments of Rs 64,196 crores,” the minister said.

He also said that India’s power sector underwent a transformation phase to become “surplus” from a deficit in the last nine years.

More than 185 gigawatts (GW) of generation capacity has been added “transforming the country from a power deficit to a power surplus”. The total installed power generation capacity currently is 416 GW. The installed capacity is now close to double the peak demand and India is exporting power to neighbouring countries, he said. The maximum demand till date has only been 221 GW, he said.

The aggregate technical and commercial losses of discoms have declined significantly from 22% in FY 2021 to 16.44% in FY2022.