Shock for income tax payers in Himachal as power subsidy to end soon
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Preparations have begun in Himachal Pradesh to halt electricity subsidy for domestic consumers with an annual income exceeding Rs 6 lakh.
The Himachal Pradesh State Electricity Board has initiated the process of collecting data on income tax payers, marking the first step towards excluding high-income households from the benefit of free electricity.
Consumers falling under the Rs 6 lakh income bracket will continue to enjoy cheap electricity.
The board is gathering income tax data from various government departments and identifying consumers through PAN numbers. These affluent domestic users will soon lose access to the state’s scheme of 125 units of free electricity per month. The board plans to submit a formal proposal to the government after completing the data collection within a month. If approved, the new system may come into effect from January 2025.
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The government’s decision to stop electricity subsidy for wealthier consumers was made during a cabinet meeting in July.
Additionally, the one-family-one-meter rule will apply, ensuring only one meter per household qualifies for the benefit. Currently, the subsidy applies only to monthly consumption of up to 300 units.
Since October 1, the state has already stopped the Rs 1 subsidy for consumption beyond 300 units. However, those using less than 300 units per month will continue to receive subsidy ranging from Rs 1.83 to Rs 3.53 per unit, depending on the slab.
Himachal to save Rs 800 crore annually
By ending subsidy for high-income consumers, the state government anticipates savings of Rs 800 crore per year. At present, the government provides an annual subsidy of Rs 1,200 crore to the electricity board to ensure affordable electricity for consumers.
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In addition, Rs 100 crore is spent to offer free electricity for domestic consumers using up to 125 units monthly. Himachal Pradesh has more than 25 lakh domestic consumers benefiting from power subsidy.
“Work has already begun based on the cabinet’s decision to stop the electricity subsidy. Data on income tax payers is being collected, and once approved by the state government, the subsidies for higher-income consumers will be discontinued,” said a senior official of the State Electricity Board.
