On May 29, Delhi Chief Minister Arvind Kejriwal credited the AAP government for making Punjab State Power Corporation Limited (PSPCL) profitable. Sharing a news report stating that PSPCL earned a profit of Rs 900 crore in the last financial year (2023-24), Kejriwal claimed that the company was running at a loss during previous governments and turned profitable despite providing free electricity under AAP’s power subsidy scheme.
Kejriwal tweeted in Hindi, “These are the results of the honest hard work of the AAP government. I congratulate the 3 crore people of Punjab and Bhagwant Mann ji for this great achievement.”
पंजाब स्टेट पॉवर कॉर्पोरेशन लिमिटेड 900 करोड़ के फ़ायदे में आ गया है। पिछली सरकारों में जो PSPCL घाटे में चल रहा था आज वो फ़्री बिजली देने के बाद भी फ़ायदे में है। ये नतीजे हैं AAP सरकार की ईमानदार मेहनत के। इस शानदार उपलब्धि के लिए मैं पंजाब के 3 करोड़ लोगों और भगवंत मान जी को… pic.twitter.com/aC4CUWrweE
— Arvind Kejriwal (@ArvindKejriwal) May 29, 2024
However, an analysis of PSPCL’s financial history reveals inconsistencies in Kejriwal’s claim. While it is true that PSPCL earned a profit after suffering a loss in the previous year, the company was more profitable before AAP came to power in Punjab. Notably, the loss occurred under the AAP government after profits were recorded under the previous Congress administration.
The Tribune report Kejriwal cited mentioned that PSPCL’s profit was due to improved coal supply from the Pachhwara coal mine and the ability to sell power through the exchange.
Financial statements show that after AAP’s Bhagwant Singh Mann-led government took office in Punjab in March 2022, PSPCL reported a massive loss of Rs 4,775.93 crore for the financial year 2022-23. In contrast, under the Congress government, PSPCL had reported profits of Rs 1,446.10 crore in 2020-21 and Rs 1,069.21 crore in 2021-22.
This means that under AAP, PSPCL went from a profit of Rs 1,069.21 crore to a loss of Rs 4,775.93 crore, a significant decline. Despite suffering losses in 2018-19 and 2020-21, PSPCL’s profit and loss statements have varied significantly over the years.
Therefore, Kejriwal’s claim that PSPCL was previously loss-making and was turned profitable by the AAP government is misleading. The company had been more profitable before AAP took power.
Kejriwal also claimed that PSPCL made profits even after providing free electricity. This is misleading because PSPCL does not provide free electricity; the subsidies for free power are funded by the government, not the power company. The Punjab government pays PSPCL for the free electricity provided to consumers as per AAP’s election promise.
Last year, Punjab CM Bhagwant Mann announced that his government cleared the entire electricity subsidy bill of Rs 20,200 crore. “In 2022-23, which is the first year when the Punjab government paid the entire subsidy bill of Rs 20,200 crore to the Punjab State Power Corporation Limited. Not even a single penny was pending towards the PSPCL,” the CM told the media in April 2023.
The subsidy amount of Rs 20,200 crore included Rs 9,063 crore for free electricity to the farm sector, Rs 8,225 crore for domestic consumers, and Rs 2,910 crore for subsidized power to industry. For the year 2024-25, the state government allocated Rs 20,477 crore for power subsidies in the budget, which includes Rs 7,780 crore for domestic consumers, Rs 9,330 crore for farmers, and Rs 3,367 crore for industries.
Power companies often face challenges in collecting bills from consumers, but the power subsidy eliminates this problem as the state government directly pays the bill. Therefore, PSPCL has earned a profit not despite providing subsidies, but partly because of it, as the state government ensures timely payment to PSPCL.
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