The growth in power subsidy ‘particularly alarming’

It represents over 1% of Gross State Domestic Product

The growth in the power subsidy being provided by the State is “particularly alarming”, according to the White Paper on Tamil Nadu’s finances. Observing that the subsidy now represented more than 1% of the Gross State Domestic Product (GSDP), the document explained the reasons for the increase in power subsidy. According to the figures of revised estimates for 2020-21, the average rate of realisation by the Tamil Nadu Generation and Distribution Corporation (Tangedco) was ₹6.7 per unit against the average cost of supply of ₹9.06 per unit, leaving a shortfall of ₹ 2.36. As for the agriculture sector and domestic consumers, Tangedco was not getting the full subsidy payout for the energy sold to them. It had got a subsidy payout of ₹3.32 per unit for the farm sector and ₹1.09 per unit for the domestic category. While the recovery from the former was nil, it was ₹2.23 per unit from the latter. With 32,639 million units of electricity supplied to the domestic sector, the total loss on account of domestic supply was ₹18,735 crore during 2020-21.