Subsidy – CAG Flags Uneven Benefits Under Delhi’s Power Subsidy Policy
Subsidy – Delhi’s electricity subsidy scheme has come under scrutiny after the Comptroller and Auditor General (CAG) found that its benefits were not adequately focused on economically disadvantaged consumers. Instead, the audit found that households using more electricity received a larger subsidy per connection than those in the lowest consumption category.
Higher Consumption Consumers Received Larger Benefits
According to the CAG report, which was tabled in the Delhi Assembly by Chief Minister Rekha Gupta on Friday, the government spent Rs 3,161 crore on electricity subsidies during 2022–23.
More than 30 lakh domestic consumers who used between zero and 200 units of electricity received an average annual subsidy of around Rs 6,000 per connection. In comparison, approximately 16.6 lakh consumers whose consumption exceeded 200 units received an average subsidy of more than Rs 10,000 per connection.
The audit calculated that the average subsidy received by consumers in the higher consumption category was around 70 per cent greater than that provided to households consuming up to 200 units.
CAG Questions Subsidy Threshold
The CAG also examined the basis for maintaining a consumption threshold of 400 units. The report noted that this threshold covered nearly 80 per cent of domestic electricity consumers in Delhi.
However, auditors said they could not find a documented rationale explaining why the 400-unit level had been selected. The absence of supporting records was highlighted as part of the audit findings.
The report concluded that the subsidy framework did not specifically focus on the disadvantaged sections of society. Instead, the benefit was extended across a large portion of the domestic consumer base.
Subsidy Given Despite Long Periods Without Consumption
The audit also identified instances where electricity consumers continued to receive subsidies despite recording no electricity consumption for extended periods.
More than 50,000 consumers recorded zero consumption continuously for over 12 months but were still provided subsidies amounting to Rs 17.81 crore.
Another group of more than 90,000 consumers had no recorded consumption for periods ranging from six to 11 consecutive months. They collectively received subsidies worth Rs 11.88 crore.
The report further found that more than 1.7 lakh consumers recorded continuous zero consumption for between three and five months. Subsidies amounting to Rs 12.57 crore were provided to these consumers during the period examined.
Audit Covered Four Financial Years
The CAG’s assessment covered four financial years, from 2019–20 through 2022–23. Its findings focused on how Delhi’s power subsidy policy was structured and how public funds were distributed among different categories of domestic electricity consumers.
The observations raise questions about whether the subsidy mechanism was sufficiently aligned with its stated objective of supporting consumers who needed financial assistance most. The audit findings also point to the need for clearer documentation and stronger targeting mechanisms when designing large-scale public subsidy programmes.