Jammu and Kashmir Government Presents Reform-Focused Power Budget


Jammu & Kashmir Finance Minister Haseeb Drabu (C), Minister of State for Finance, Labour and Employment Ajay Nanda (R) and Minister of State for Tourism, Culture Priya Sethi releasing the 2017 Calendar in Jammu. Credit: PTI

Jammu: Jammu and Kashmir finance minister Haseeb Drabu today presented the power budget with a focus on putting in place a roadmap to address purchase liability and make reform the core agenda for the sector.

The second power budget, the first was presented six months ago, put in place a transparent accounting system for the sector as the government in 2016-17 spent Rs 12,000 crore on power purchases and liquidating past liabilities.

Drabu said budgetary provisions have been made for a fully-funded investment plan under the Prime Minister’s Development Plan (PMDP).

“The investments were directed towards making systemic and capacity improvements in the Transmission and Distribution infrastructure in the state, with an aim to supply adequate quality power and make the State Power Development Corporation debt-free with financial restructuring,” he said.

“In 2016-17, we have spent Rs 12,000 crore on power purchases and liquidating past liabilities; which have been accumulated on account of serving power, despite this the power situation on the ground – in winter in Kashmir and in summers in Jammu – hasn’t improved,” he said.

Drabu said till date the government has liquidated more than Rs 4,000 crore of past liability and the balance will be cleared by the end of the financial year.

As stated in the state budget, the power deficit in financial terms is a little more than Rs 2,500 crore after adjusting for the subsidy element and reasonable transmission and distribution losses. “If this deficit is taken care of, we would have no budgetary deficit,” he said.

“Despite the tariff being one of the lowest in the country, our power collections are consistently one third or one fourth of what is budgeted. It is a fact that a vast majority of users don’t pay electricity bills at all or in line with their consumption,” he said.

Drabu said last year not much infrastructure could be created due to the turmoil in the Valley.

The minister said three lakh households in the state have no electricity connection. “(But) we have 20 lakh households consuming electricity. The national average for electricity consumption per household is three units of electricity per day,” he added.

On this basis, J&K should be buying 3,200 MUs to provide electricity to its 20 lakh households. Instead, the state buys 6,400 MUs for the household segment at an average consumption of six units per household after accounting for transmission and distribution losses of 30%, he said.

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