Punjab Government to oppose Bill aiming to replace subsidy with DBT

Ruchika M Khanna

Tribune News Service

Chandigarh, July 2

The Punjab Government will oppose the proposed Electricity (Amendment) Bill, 2020, “as it infringes on the federal structure of the country”, during a virtual meet between Union Minister of State for Power RK Singh and representatives of various state governments on Friday. The Bill proposes to substitute free electricity to farmers with subsidy through direct benefit transfer (DBT).

Officials said the proposed amendments were an attempt to take away powers from the states, especially with regard to appointment of power regulators. The Centre wants to table the proposed Bill in the next session of Parliament.

According to sources, if the power regulator is appointed by the Centre, the state government will lose the “influence” over deciding electricity tariff. Moreover, free electricity to the farm sector is a politically sensitive issue in Punjab.

Though the Central Government has clarified that it would not take away the power to appoint members or chairperson of the State Electricity Regulatory Commission (SERC), the state government feels that it would have little say in the appointments.

The Bill proposes to have a common selection committee (instead of multiple panels), having equal representation from the Centre and the states concerned, to be headed by a sitting judge of the Supreme Court.

It is pertinent to mention that in May, the electricity subsidy bill of the Punjab Government stood at Rs 8,275 crore this year. The Central Government had asked the state to do away with free power and replace it with the DBT in order to avail additional market borrowings, but Chief Minister Capt Amarinder Singh had refused to do so.

Instead, the state government has been exploring ways to reduce the subsidy burden by solarising its agricultural power feeders.

Finance Minister Manpreet Singh Badal has clarified that they were examining the proposal of the Punjab State Farmers’ Commission to do away with power subsidy for farmers having over 10 acres of land. However, he reiterated that free power would not be replaced by the DBT.

Fresh face-off with centre

• Officials say the proposed amendments are an attempt to take away powers from the states, especially with regard to appointment of power regulators.
• According to sources, if the power regulator is appointed by the Centre, the state government will lose the “influence” over deciding electricity tariff.
• Though the Centre has clarified it would not take away the power to appoint members of the State Electricity Regulatory Commission, the state feels it will have little say in the appointments.