The relief from Chief Minister N. Kiran Kumar Reddy’s promise of a review of the power tariff hike proposals is likely to be only marginal.
Mr. Reddy who is on a visit to Nellore as part of ‘Indiramma Baata’ programme on Monday asserted that the decision to be taken on April 4 or 5, on review was aimed at avoiding any burden on poor people. He had hinted at the same in Chittoor on Sunday. This has raised hopes among people that the quantum of relief could be substantial.
But the present tight financial situation may not allow the Government to provide more subsidy that would be required to reduce the burden. As per 108 Section of the comprehensive (Central) Electricity Act 2003, which replaced all electricity-related Acts in States and at the Centre, the State Government can issue directions, guiding Andhra Pradesh Electricity Regulatory Commission over policies involving public interest.
When such directions are issued for reducing the burden on consumers, the Government needs to release subsidy to the four distribution companies to the extent they are affected financially. It can neither reverse nor alter the tariff order issued by APERC for 2013-14.
It simply means the Government would have to release additional subsidy over and above Rs. 5,480 crore, it had already indicated in a letter sent to APERC, a day before the tariff order was issued. Given the fund crunch uncertainty looming large over how much extra subsidy the Government could spare to offset the adverse impact on the consumers, particularly those in the lower slabs of the consumption.
Last year, APERC, in its tariff order, had approved a rate of Rs 2.60 per unit for a consumption up to 100 units. Following an undertaking given by the Government to release additional subsidy, it reduced the rate to Rs 1.45 per unit for the first 50 units out of this while retaining Rs 2.60 for the next 50 units.
In the order issued for the current year, the rate for the first 50 units is retained at Rs 1.45 but it has been raised to Rs 3.25 for the next 50 units. This certainly amounts to additional burden on poorer sections because, they normally account for a monthly consumption of below 100 units. The Chief Minister is mostly likely to announce some relief to this section which account for more than a half of the 2.5 crore power consumers in the State.
If government proposes to reduce burden on consumers then it should release subsidy to the four distribution companies