The Union power ministry has dropped the plan to disburse electricity subsidy to eligible consumers like farmers and households through the direct benefit transfer (DBT) system, sources said.
The development comes after a section of farmers — the consumer category which receives the highest amount of subsidies among all electricity users — raised concerns that the DBT mechanism may lead to them paying higher power bills.
While the cost of power supply at the national level is around `6 a unit, average tariffs for domestic and agricultural consumers are lower by 27% and 87% respectively. These sections are partially cross-subsidised by commercial and industrial users, who pay bills at rates 52% and 23% higher than supply costs, respectively.
