Faced with a severe financial crunch, the Himachal Pradesh Government on Friday decided to do away with subsidy on electricity bills for all income taxpayers in the state.
The decision taken by the Cabinet will affect taxpayers across the board, including the Chief Minister, ministers, legislators, bureaucrats, Class I and II employees, businessmen, etc.
However, people from the below poverty line (BPL) /Integrated Rural Development Programme (IRDP) categories besides other weaker sections who do not pay income tax will continue to get the benefit.
Already in the red, the HP State Electricity Board (HPSEB) accumulated Rs 1,800 crore in losses in 2023-24. The board, which has over 12,000 employees, gets a grant of Rs 950 crore annually from the state government. The amount that the HPSEB will save by way of the Cabinet decision is yet to be worked out, point out officials.
The Cabinet further approved rationalisation of provisions for zero electricity bill for domestic consumers by restricting subsidy to ‘one family, one meter’ and linking the electricity connections with ration cards (Aadhaar seeded).
There are 26 lakh power consumers in the state, of whom 12 lakh are getting the zero electricity bill benefit by consuming less than 125 units. With many consumers having multiple meters, the government proposes to save around Rs 200 crore annually by rationalising the zero electricity bill for domestic consumers.
The state is grappling with a severe financial crisis with the total debt burden crossing Rs 85,000 crore. With the reduction in revenue deficit grant and GST allocation, the fiscal health of the state may worsen.