Electricity overcharging: Cross-subsidies cost businesses Rs 75k crore in FY19

Since the National Tariff Policy 2016 prescribed the tolerable extents of cross-subsidy among various segments of electricity consumers, the market-distorting system that jacks up the costs of industries and businesses, hasn’t seen even a smidgen of correction. In fact, in absolute term, the cross subsidies have marginally increased in the four years to FY19 (see chart).

Among them, industrial and commercial consumers have borne a cross-subsidy burden of Rs 75,027 crore in FY19 against Rs 67,785 crore in FY16. Of course, a larger part of the subsidies – largely cornered by the domestic and agriculture consumers – is borne by state governments and these were to the tune of Rs 1.1 lakh crore in FY19, `against Rs 75,608 crore in FY16.