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LATEST NEWS UPDATES | Delhi's power subsidy policy helps rich more than poor: Study -Sanjay Dutta

Delhi's power subsidy policy helps rich more than poor: Study -Sanjay Dutta

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published Published on Apr 19, 2017   modified Modified on Apr 19, 2017
-The Times of India

NEW DELHI: The Delhi government's policy to subsidise power for households is undoubtedly among the most generous in the country but it is benefiting the rich more than the poor due to inefficiencies.

While poor households on an average get subsidy of around Rs 1,000 per year as they consume less electricity, rich households end up benefiting by Rs 9,000 on account of fatter power bills, a Brookings India research paper has said.

This is happening due to the combined impact of the eligibility criteria, which is based on how much one consumes, and the high subsidy cut-off point of 400 units a month. As a result, around 80% of households qualify for the 50% subsidy paid with taxpayer's money.

"In some months, this goes as high as more than 95% of households. This is beyond cross-subsidies approved by the Delhi Electricity Regulatory Commission in the tariffs that keep household power prices lower than cost," the paper written by Brookings India fellow Rahul Tongia said.

"Mid-level consumers, ostensibly the middle classes, enjoy more benefits on a percentage basis than the poor. The lowest tier gets under 33% subsidy on net billing on an average, while those using a little under the limit get over 40% net subsidy," the paper added.

Delhi is one of the richest states in the country and has the highest per capita power consumption rate for households. But the state government has shown an overwhelming reliance on subsidy to keep tariffs in check, unlike other states which are focusing on a mix of policy revisions and improving efficiency to reduce tariffs.

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The Times of India, 18 April, 2017, http://timesofindia.indiatimes.com/city/delhi/delhis-power-subsidy-policy-helps-rich-more-than-poor-study/articleshow/58239243.cms


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