The subsidy burden on the state exchequer as result of this decision would more than double and is expected to be at least Rs 300 crore. This is over and above the burden that the state already faces on account of free power to agriculture which, according to the Chief Minister, is around Rs 1200 crore—thereby taking the total subsidy burden on account of free power to Rs 1500 crore.

Under its earlier policy, the state allowed 200 units of free power to SC consumers with the caveat that the household should not have a connected load of more than 500 watts (covering basic lighting and some fans). Under the new decision cleared by the state cabinet on May 31, the caveat of 500 watts has been lifted.

Even if a domestic consumer has three air conditioners, the first 200 units of power consumed would be borne by the state government as long as the consumer is an SC, irrespective of economic status.

Put another way, an SC consumer with a 1000 watt AC can run it free of cost for 200 hours or for slightly over eight days continuously without worrying about the bill. State government sources, however, did clarify that the consumer would be subject to the fixed commitment charge for load above 1 kw (1000 watts).

While the Electricity Act doesn’t disallow state governments from subsidizing sections of society as long as it pays for it upfront, states starting from Andhra Pradesh, then Maharashtra and now Punjab have announced free power to sections of society, especially just around election time. The Power Ministry has already held back funds for rural electrification in AP as the state is yet to justify its power subsidy scheme.