A day before the public hearings scheduled by the Telangana State Electricity Regulatory Commission (TSERC) over the discoms’ tariff hike proposals, budgetary allocations by the State government towards power subsidy prove to be a watered down affair, indicating heavy tariff hikes imminent for consumers.
The Telangana State Budget for the year 2015-16 shows the allocation for agricultural and allied subsidies at Rs. 4,257.24 crore, which is way below the revenue gap shown by the Southern and Northern power distribution companies in their Aggregate Revenue Requirement notes submitted to the TSERC.
The discoms projected the revenue gap at Rs. 6,476 crore after tariff hikes, which is 52 per cent higher than the budgetary allocations. The deficit can be realised only through further rise in tariffs, unless government chips in with supplementary allocations, says M. Venugopala Rao from the Centre for Power Studies. Nevertheless, the provisions are higher than the Rs.3,000 crore allocations in the previous budget towards subsidy.
The total budgetary provisions for Energy sector have been put at Rs.7,400 crore, of which Rs.1,380 crore are shown under planned outlay. Of the planned budget, Rs.1,000 crore are marked for capital infusion into the Telangana State Power Generation Corporation (TSGENCO), for various projects on the cards.
TSGENCO got Rs.1,000 crore more as grant-in-aid, which is assumed to have been given for financial restructuring of the public utility.
Another Rs.455.76 crore has been allocated for the Telangana Tranmission Corporation under grants-in-aid.
In his budget speech, Minister for Finance E. Rajender proposed 4,000 off-the-grid solar power plants of one kilowatt capacity for addressing household needs, for which the state government will offer 20 per cent subsidy in addition to the central subsidy.
However, the plan allocations for the Telangana New and Renewable Energy Development Corporation (TNREDC) have been put at a little over Rs.180 crore, which is Rs.60 crore less than previous year’s budgetary provisions.
“Overall allocation for Energy is substantially higher. But the subsidy provisions will not suffice the implicit subsidy requirements projected by the discoms,” Mr.Rao says.
