DF finds a way out on MSEB payments for free power

The financial strapped Democratic Front (DF) government has solved its problem of inadequate funds to meet the free power subsidy bill raised by the Maharashtra State Electricity Board (MSEB) last week for Rs 385 crore.

Instead of the state treasury having to pay the amount to MSEB for the free power supplied to 23 lakh farmers, the state finance department has suggested that a book adjustment with the state power utility for Rs 410 crore is a simpler way out.

Even though the MSEB has told the Maharashtra Electricity Regulatory Commission (MERC) on record that there is no scope in the current fiscal years for any book adjustment, the state government has discovered that it had paid this amount to the World Bank on behalf of the MSEB some time ago. Now that it is required to pay the MSEB Rs 385 crore from its own coffers, it has come up with this new formula.

The formula was arrived at since the state finance department had expressed its inability to pay the amount. It had categorically stated that no budgetary provision existed for releasing the Rs 385 crore to meet the subsidy bill raised by the MSEB.

The finance department had pointed out to the state Cabinet that if the subsidy was paid out of the state treasury to MSEB the state government would be financially crippled and unable to meet its Rs 1,300 crore monthly salary bill within three months.

Said senior Mantralaya official, "The state government has to approach the state legislature for making any such payment to the MSEB, since no budgetary provision was made. Even for a sum exceeding Rs 2 lakh the same procedure (approaching the state legislature) has to be followed."