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    Latest NewsFree power promise leaves Punjab in fiscal lurch as populism overrides economics

    Free power promise leaves Punjab in fiscal lurch as populism overrides economics


    has been grappling with a debilitating financial crunch for long owing to the rising power subsidies that have drained the state exchequer in pursuit of gaining electoral support. A deep dive analysis into the power sector reveals how populist measures to provide free or subsidized electricity to different voter segments have taken precedence over prudent fiscal management.

    Originally introduced as a poll promise in 1997 by the SAD-BJP government, the provision of free power to the farm sector snowballed into a competitive populism between political parties as each new dispensation tried to outdo the other in wooing voters with these sops. If the Congress initially rolled out 100 units of free power for certain socially disadvantaged groups in 2002, the subsequent Akali-BJP government doubled this limit as well as extended the benefit to freedom fighters and Below Poverty Line consumers. The trend further intensified as parties vied to show more generosity ahead of elections.

    When the AAP stormed to power this year riding high on the promise of 300 units of free domestic power, many warned of the fiscal repercussions but the government was intent on fulfilling its poll guarantee, pegging the subsidy bill at a projected Rs. 7,384 crore for the current fiscal. However, field reports suggest rampant overuse and tampering of meters to claim more than allocated free units have likely inflated the costs much beyond estimates, draining state coffers severely. Worse, the largesse is reportedly being misused through creation of multiple connections within several housing units.

    Experts opine that providing unconditional freebies is fiscally unsustainable and economically counterproductive in the long run. While intended to help citizens grappling with inflation, such measures ironically weaken the state's economic , rendering it incapable of funding development works and social services. It is high time political parties move beyond short-term vote-bank and shift to more holistic welfare schemes combining incentives with penalty for overuse to strike a balance between populism and fiscal prudence. The well-being of citizens and the state's economic future cannot be sacrificed at the altar of hollow populism. Prudent policy changes are the need of the hour to salvage Punjab's fiscal situation.

    The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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