Consumers need relief, transparency

The approval of a 6.83 per cent electricity tariff hike in Jammu and Kashmir from September 1 is bound to concern consumers, particularly households already facing pressure from rising living costs. While the increase has been described by the regulator as moderate, its impact will ultimately be felt in monthly household budgets. The Joint Electricity Regulatory Commission (JERC) has justified the revision by pointing to a substantial revenue gap faced by JPDCL and KPDCL. Against an annual revenue requirement of Rs 10,275.72 crore, the two distribution companies were estimated to generate only Rs 7,352.87 crore at existing tariffs, leaving a gap of nearly Rs 2,923 crore. The government subsidy of Rs 2,420.78 crore has helped prevent a much steeper increase. Indeed, the Commission’s observation that meeting the entire gap through tariffs alone could have required an increase of around 40 per cent explains why a moderate hike was preferred. A sudden increase of that magnitude would have imposed an unacceptable burden on consumers. But the present decision also raises questions about the sustainability of the power sector’s finances. Consumers cannot indefinitely be expected to bridge the gap between the cost of supply and revenue collection. Subsidies provide immediate relief, but they ultimately represent a burden on public finances and taxpayers. The government and distribution companies must therefore focus on reducing technical and commercial losses, improving billing and collection efficiency, curbing power theft and ensuring that subsidies reach their intended beneficiaries. Better financial discipline within the utilities is essential. The revised domestic rates, including Rs 2.45 per unit up to 200 units and Rs 4.20 for 201-400 units, should also be accompanied by clear communication to consumers about how their bills will change. Tariff rationalisation may be necessary, but affordability must remain central to power policy. The long-term solution lies not merely in higher tariffs or larger subsidies, but in building an efficient, financially sustainable and accountable electricity distribution system.