Election years mean a bonanza for Punjab’s power consumers. The state has seen the incumbent governments either slashing the tariff or keeping them unchanged in the election years. The tariff, however, is hiked in the first year of the government, past data shows.
On Friday, the incumbent Aam Aadmi Party (AAP) government slashed the tariff by up to Rs 1.55 per unit for domestic consumers and up to 79 paise for commercial users. The electricity rates for industrial units too have been reduced by up to 74 paise per unit, as per an order issued by Punjab State Electricity Regulatory Commission (PSERC). The new tariff will implemented from April 1.
While the PSERC maintained that it was prioritising consumer interest by passing on the benefits worth Rs 7,851.91 crore, political experts say the decision has elections written all over it.
Punjab goes to polls early next year. The AAP government is looking to fulfill a key promise of providing Rs 1,000 per month to all women above the age of 18. The promise was made ahead of the 2022 assembly elections and its non-fulfillment till date become an ammunition in the hands of the Opposition.
The reduction in tariff will help state exchequer save money on power subsidy. The saving is expected to fund the government’s promise of rolling out the monthly allowance for women when it tables the Budget on International Women’s Day on Sunday.
A perusal of electricity tariff revisions in Punjab over the past two decades suggests a clear political pattern — tariffs have often remained unchanged or were even reduced in election years, only to be increased sharply soon after polls.
Data on the state’s Average Cost of Supply (ACOS) and annual tariff revisions from 2002-03 to 2024-25 indicates that governments have repeatedly avoided raising electricity prices during election cycles.
For instance, in 2006-07, an election year, when Congress led by Capt Amarinder Singh was in power, the power tariff saw no increase even though the cost of supplying electricity had climbed to Rs 3.40 per unit. A similar trend was visible ahead of the 2012 Assembly elections when tariffs rose by 9.19% in 2011-12. At that time, SAD-BJP combine was in power. The sharpest increase came immediately afterward in 2012-13, when tariffs jumped 12.08%. This was the first year of second term of SAD-BJP government in the state.
The pattern repeated in later years as well. In 2016-17, another election year with SAD-BJP being in saddle, tariffs were reduced by 0.65% despite the supply cost touching Rs 5.98 per unit. But the following year, 2017-18, saw a significant 9.33% hike. This was when Congress government came to power in March 2017.
Likewise, in 2021-22, when Punjab again went to the polls, and Congress leader Charanjit Singh Channi was the Chief Minister, the tariff was reduced by 0.89% while the cost of supply stood at Rs 6.42 per unit. In the years after the election cycle, tariffs rose again, including a substantial 8.64% increase in 2023-24, during the AAP government.
The trend can be traced further back as well. After the elections in early-2000s, tariff saw an increase of 10% in 2002-03, followed by another rise of 4.90% in 2007-08 after the subsequent electoral cycle.
Meanwhile, the cost of supplying electricity in the state has steadily climbed from Rs 3.51 per unit in 2002-03 to Rs 7.16 per unit in 2024-25, reflecting higher generation and fuel costs. Experts say that when tariff hikes are postponed during politically sensitive periods, the gap between the cost of supply and the revenue recovered widens, making larger increases inevitable later.
“This points to a recurring cycle in Punjab’s power sector. It involves tariff restraint in election years followed by steeper revisions afterward, raising questions about whether electricity pricing decisions are influenced as much by political timing as by economic realities,” said an expert.
