Responding to the demands from the public, especially the poor and the middle class, Chief Minister Jayalalithaa on Tuesday announced a partial rollback of the power tariff hike. It is a move that is expected to grant a big relief to middle class households from the steep hike in their bi-monthly electricity bills.

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Reading out a suo motu statement in the Assembly, even as the DMK, DMDK and CPI(M) staged a walk-out after being refused permission to raise the tariff hike issue, Ms. Jayalalithaa said the government had no authority to reduce the tariff fixed by the Tamil Nadu Energy Regulatory Commission (TNERC), but had decided to subsidise the power bill further, benefitting 1.50 crore domestic consumers.

Announcing the revision, she said the tariff for domestic consumers with consumption of up to 100 units in two months would be reduced by 10 paise per unit and tariff for those consuming up to 200 units would be reduced by 30 paise per unit.

For families consuming 201 to 500 units, the tariff will be reduced by one rupee per unit for the first 200 units and 50 paise per unit for the remaining 300 units. Even if there was no tariff reduction for those with a consumption of over 500 units, the tariff for this category was less than the production cost per unit, Ms. Jayalalithaa said.

The government will provide Rs 740 crore as additional subsidy to the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for the purpose, thereby pushing up the total subsidy to about Rs 4,294 crore. She said TANGEDCO was already in a ‘debt trap situation', as it was borrowing funds to fulfil its repayment and interest payment obligations. Its accumulated losses amounted to Rs. 50,000 crore, its borrowings from financial institutions exceeded Rs. 45,000 crore and it owed Rs. 11,000 crore in arrears to private producers and contractors.

She emphasised that the power tariff in the State was the lowest for domestic connections with a consumption of up to 200 units when compared to Karnataka, Andhra Pradesh, Kerala, West Bengal, Maharashtra, Gujarat and Uttar Pradesh. The tariff reduction was effected as the government received petitions from the public that it would be an additional burden on the poor and the middle class families, she said.

Already, the government was providing subsidy of Rs 1.50 per unit for domestic connections with consumption of up to 100 units; Re. 1 per unit for those with consumption of up to 200 units and 50 paise per unit for three hundred units for those with consumption of up to 500 units. Besides, the government was fully subsidising power for huts and agriculture, Ms. Jayalalithaa said.