Himachal govt ends power subsidy for commercial consumers, big businesses to face higher costs

Shimla, August 30: In a decisive move to address the financial challenges faced by Himachal Pradesh, the Sukhu government has announced the abolition of power subsidy for commercial consumers. This significant policy change is part of the government’s ongoing efforts to reduce the state’s mounting debt, which currently stands at ₹86,584.9 crore.

The government has decided to withdraw the one rupee per unit power subsidy previously given to consumers engaged in commercial activities. As a result, commercial users with meters having a capacity of more than five kilowatts will now have to pay ₹6.52 per unit for electricity. This increase in rates is expected to impact large businesses, such as hotels, malls and other large commercial enterprises. However, most small shopkeepers will not be affected by this change.

While the subsidy removal is targeted at commercial consumers, the government has assured that domestic, industrial and agricultural consumers will continue to get relief through the existing subsidy on power rates. The decision has been taken to save small consumers from financial burden, while addressing the more important financial issues of the state.

The power secretary has issued a letter to the State Electricity Regulatory Commission, requesting a revision of power tariff to remove the subsidy. Withdrawal of the one rupee subsidy will also impact several other sectors, including irrigation, drinking water schemes, street lights, temporary supply, electric vehicle (EV) charging stations, railways and non-domestic and non-commercial consumers.

Chief Minister Sukhvinder Singh Sukhu justified the decision, saying the subsidies were initially given to support the power sector, especially for the benefit of hotels and similar businesses. However, in view of the deteriorating financial position of the state, the government has decided that these subsidies are no longer sustainable and must be withdrawn to improve financial health.

While the state is grappling with its rising debt, the Sukhu government’s decision underlines the difficult challenges it faces in balancing fiscal responsibility with economic growth. The impact on the commercial sector, particularly the hospitality industry, will be closely watched as businesses adjust to the new, higher power costs.