BENGALURU: The Comptroller and Auditor General (CAG) has flagged several discrepancies in the implementation and auditing of Karnataka’s Gruha Jyothi free electricity scheme, including extension of subsidy to apparently ineligible consumers, unusually long billing cycles, differences in electricity consumption calculations and inconsistencies between database records and physical bills.
The observations have emerged from a pilot audit undertaken to examine the implementation of the scheme. The audit also recorded difficulties in accessing data from the Energy Department and electricity supply companies (ESCOMs), according to the audit observations cited in the report.
The Gruha Jyothi scheme provides eligible domestic consumers with free electricity up to a monthly consumption limit of 200 units. According to Karnataka’s Economic Survey 2025-26, the scheme had about 1.66 crore beneficiaries as of December 2025, while the subsidy released from July 2023 to December 2025 was ₹22,040 crore.
According to the CAG’s pilot audit, consumers whose electricity connection had subsequently shifted from domestic to commercial tariff were nevertheless extended the Gruha Jyothi subsidy in some cases. The audit has identified this as an issue requiring examination of beneficiary eligibility.
The audit also examined whether monthly billing was being carried out in accordance with the operational guidelines. The guidelines require meter reading and billing every month so that eligibility for the subsidy can be determined on the basis of actual electricity consumption.
However, the audit reportedly found billing cycles extending from 45 days to as much as 518 days in some cases, instead of the prescribed 30-day period. Such extended billing cycles can make it difficult to determine whether a consumer crossed the monthly 200-unit eligibility ceiling.
The CAG also noted cases where monthly meter readings were unavailable and subsidy calculations were based on estimated or presumed consumption instead of actual usage. The audit observed that when billing periods are extended, it becomes difficult to establish whether consumption remained within the monthly eligibility limit, potentially resulting in subsidy being credited without adequate verification.
Another observation concerns discrepancies in the calculation of total electricity consumption. Normally, consumption is calculated by subtracting the previous meter reading from the current reading. The audit, however, reportedly found variations in consumption calculations, with differences of up to 824 units in the records examined.
The audit also examined the calculation of entitlement units used for determining the subsidy. According to the findings, discrepancies of up to 10 units were noticed in entitlement calculations when compared with the criteria prescribed in government orders.
The CAG further found differences between billing data submitted for audit and copies of actual physical bills issued to consumers. The discrepancies reportedly related to components such as arrears, current demand, interest on revenue and interest on tax.
The audit said such differences warranted closer examination of the underlying information systems. According to the observation, discrepancies between the central database and physical bills could indicate that some changes were being made outside the centralised system or that such changes were not being captured in the audit trail.
The CAG also pointed to the possibility of manual corrections or systemic errors in the primary database. The observation does not by itself establish that such alterations were made deliberately, but highlights the need for stronger controls and audit trails in the billing system.
Another significant observation relates to the timing of the scheme’s benefit. The audit reportedly found that the Gruha Jyothi benefit had been extended for electricity consumption in June 2023, although the relevant government orders specified July 2023 consumption as the starting point.
In one exception report concerning the Harapanahalli subdivision of the Davangere division, red flags were identified in the records of 14,773 beneficiaries covering 83,417 bills. The audit has indicated that these cases require further examination.
The pilot audit was also affected by restrictions on access to the electricity companies’ databases. According to the CAG observations, repeated requests were made from January 2026 for access to the master database tables. Access to 19 master database tables was eventually provided on June 6, 2026.
However, the audit team reportedly faced restrictions on the number of queries and CPU usage. The CAG said these restrictions made it difficult to run complex SQL queries required for detailed analysis of the data.
The audit attributed the limitations to restrictions imposed through the IT system arrangements. It suggested that BESCOM should review its existing agreement with the IT system provider and take steps to provide adequate storage and computing capacity for analytical and audit requirements. The CAG also indicated that audit access should not be constrained by system limitations when the objective is to examine large-scale public expenditure and beneficiary databases.
The latest CAG observations are therefore likely to add another layer to the ongoing scrutiny of the scheme. The audit findings raise questions about billing frequency, consumption calculations, beneficiary eligibility, data consistency and the ability of auditors to independently analyse the large volume of electricity consumption and subsidy records.
The observations are part of a pilot audit and the identified discrepancies would require responses and verification by the Congress-ruled government, concerned departments and ESCOMs.
