The targeted subsidy of rupee 1 per unit for domestic electricity consumers and special subsidy to agricultural consumers will now continue up to March 31, 2011. The decision was taken at a meeting of the Delhi Cabinet on Monday chaired by Chief Minister Sheila Dikshit.

Informing about the decision, Ms. Dikshit said the targeted subsidy of Re.1 per unit for all domestic consumers consuming 150/200 units per month was introduced on March 1, 2008, to minimise the burden of increased tariff on the lower economic strata of society. She said the Delhi Government would be continuing with this subsidy and it has now been decided to extend the scheme from June 1, 2010, to March 31, 2011.

The subsidy is provided on consumption of up to 200 units per month in the peak months of May, June, July, August, December and January and up to 150 units per month in off peak months of February, March, April, September, October and November.

The subsidy is linked to limited consumption and has therefore been resulting in saving of power. It has also been of immense financial help to the poor families. The Delhi Government is expected to release an amount of Rs.141.57 crore on account of this targeted subsidy for the extended 10 months and the scheme is expected to benefit around 20 lakh domestic consumers.

The Chief Minister also stated that the existing special subsidy to agricultural consumers has also been extended by a year from April 1, 2010, to March 31, 2011. The estimated financial implication on account of this special subsidy will be around Rs. 1.50 crore.

The Cabinet also approved the introduction of the Delhi Tax on Luxuries (Amendment Bill, 2010) in the Legislative Assembly. The Bill intends to amend Clause I of Section 2 of the Delhi Tax on Luxuries Act, 1996, which provides for levy of luxury tax on the charges for accommodation and other services provided in hotel rooms.

The Bill would seek to increase the threshold limit for levy of luxury tax on room rent in a hotel from Rs.500 or more per day – which had been fixed in the year 1996 – to Rs.1,000 or more per day. The measure has been taken in view of an increase in the cost index of various services and is expected to benefit the small and budget hotels. Besides, the Chief Minister said the Luxury Tax on hotels has already been decreased from 12.5 per cent to 10 per cent.

Keywords: Sheila Dikshit


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