Report of Indian Institute of Public Administration ... - Ministry of Power

Madhya Pradesh
4.1.3 Subsidy Support by the State Government
4.1.3.1 Agricultural Consumption
About 73 per cent of the population in MP resides in villages and at present out of
about 65 lakh consumers in the State about 17 per cent belong to the agricultural
category. As compared to 2000-01, the power consumption by the agricultural sector
has gone up by 40 per cent in the year 2003-04 (3795 MU in 2000-01 to 5342 MU in
2003-04).
Government of MP Decision to Supply Free Power
The decision to provide free power to select categories of consumers by the State
Government in 1994 led to a situation of excessive consumption and misuse of
electricity. Thereafter the Government reviewed the situation and from January, 2001,
this facility was extended only to SC/ST consumer categories living below the poverty
line BPL).
4.1.3.2 Subsidy Support
In order to avoid tariff shock to agricultural consumers and to the weaker sections of
society, the State Government is providing subsidy support in cash to MPSEB on
regular basis. The Government is providing subsidy support to the sector not only for
the agricultural sector but also to meet the revenue deficit arising out of poor billing
and collection efficiency. The revenue collected by the Utilities is barely 70 per cent
of the cost of supply, which does not include the non-cash expenses. Details of
support in the form of subsidy made available to MPSEB by Government of Madhya
Pradesh are as under:
Rs. Crores
1500
1000
500
0
568
Subsidy Support to MPSEB by GoMP
4.43
1045
814
2002-03 2003-04 2004-05
Years
(Source: Government of MP)