Water for free, power at 50% discount: AAP govt's largesse to cost Rs 1,670 cr

The AAP government may have delivered on its promise of providing free water and power at a discounted rate to the citizens of Delhi but it will be left footing a whopping Rs 1,670 crore bill by the end of the next year.

As per the latest water and power subsidy announced by the AAP government, homes in Delhi are eligible to use upto 400 units of power at a discounted rate of 50 percent while houses with water meters can use 20,000 litres of water for free. Exceeding the limit would mean that users would have to pay the full rate for power and water used.

Water for free, power at 50% discount: AAP govts largesse to cost Rs 1,670 cr

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The schemes come into effect from 1 March and the government has promised to let the scheme continue even if tariffs are raised by Delhi's power regulator.

"We delivered on our promises on slashing power tariff by half and giving free water. We will also fulfil other promises," Kejriwal said.

But apart from those opposing it on the ground that the new scheme would encourage wastage of water and power in the capital, the AAP government will also be left footing the bill of Rs 1,670 crore by next year.

The power subsidy scheme will cost the government Rs 70 crore for the month of March and a total of Rs 1427 crore for the next financial year.

For the water scheme, Rs 20 crore will be required for March and a total of Rs 250 crore has been set aside for 2015-16. This estimate includes the cost of installing more meters to allow more people to get the benefit of piped water.

Officials said per unit of power from 0-200 slab will cost Rs 2 per unit while it will be Rs 2.97 per unit in the 201-400 slab. The rate for 401-800 slab will remain at Rs 7.30 per unit.

The subsidy for power consumers comes after multiple tariff hikes in the national capital over the last three years.

However, questions have already begun being raised over how the new Delhi government plans to fund this ambitious scheme.

As per the Delhi budget presented by the Sheila Dikshit government in 2013-2014, the deficit was at Rs 2, 060 crore, an India Today report points out. It also pointed out that Delhi's budget for 2014-15 was Rs 36,776 crore  as announced by Finance Minister Arun Jaitley in July 2014.

While the report points to the fact that the AAP government may find it difficult to maintain the subsidies for too long, the deputy chief minister has already hinted that the state government wouldn't settle for the amount being handed by the Centre presently.

"Today is an important day for the aam aadmi (common man). We are happy to announce that as promised, we are slashing rates of electricity by half and will provide free water," Sisodia said on 25 February.

As this Firstpost piece pointed out, the AAP government in Delhi by announcing the subsidies before the Union Budget on 28 February has put the pressure on the Central government to also aid the subsidies that it has promised to the people of Delhi. It may not be the most fiscally prudent decision taken by the new Delhi government, which is dependent on power and water from other states, but as far as politics go it may just go a long way towards cementing its popularity.

(with PTI inputs)

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Updated Date: Feb 26, 2015 09:34:59 IST

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