The Himachal Pradesh government is preparing to end electricity subsidies for domestic consumers with an annual income of over six lakhs. In line with a recent cabinet decision, the State Electricity Board has begun collecting data on income taxpayers to identify households that will no longer be eligible for subsidized electricity.
Currently, domestic consumers with income under six lakhs will continue to benefit from the existing electricity subsidy. However, higher-income households will soon be excluded from the scheme that provides 125 units of free electricity per month. The board is gathering income data from government departments and using PAN numbers to identify eligible consumers. A formal proposal on ending these subsidies is expected to be sent to the government within a month.
Sandeep Kumar, Managing Director of the State Electricity Board, confirmed that the decision to phase out the subsidy for high-income households is being implemented. “We are working on the cabinet’s decision, and after the government’s approval, the subsidy will be withdrawn for these consumers,” he said.
This new policy is likely to be implemented from the beginning of 2025. The government had taken this step in a July cabinet meeting, aiming to ensure that electricity subsidies are targeted at low- and middle-income families. The policy includes the “one family-one meter” provision, ensuring that subsidies are provided only to those who meet the criteria.
Currently, domestic consumers who use up to 300 units of electricity per month are eligible for subsidies. As of October 1, the state government has already stopped the one-rupee subsidy for those consuming more than 300 units per month. Those using less than 300 units still receive a subsidy ranging from ₹1.83 to ₹3.53 per unit, depending on the consumption slab.
Significant Savings for the State
By discontinuing the subsidy for wealthy households, the state government expects to save up to ₹800 crore annually. Presently, the state spends around ₹1,200 crore per year to subsidize electricity for domestic consumers. Additionally, the board incurs an expenditure of ₹100 crore each year to provide free electricity for up to 125 units per month to eligible households.
With over 25 lakh domestic consumers across Himachal Pradesh, this policy change will relieve financial strain on the government while ensuring that subsidies are focused on those who need them the most.
