Telangana government for the last two and half years indulged in extensive power purchases to meet the shortage of power in the state. But then the power challenges are going to increase this year. Due to good rains this year, the ground water in the state increased and that would lead to increase of motors for agriculture use.
The Energy Department wants a subsidy of 8000 Crore from the finance department to meet the demand with power purchases. But then the government has refused it citing poor revenues due to demonetization. Apart from the note ban, revenue will be hit in the next year due to the Supreme Court orders on liquor shops on the highway and in the initial stages of the implementation of GST.
The energy department estimates that it would have to purchase about 9500 MW in the next year which would ensure revenue gap of about 8000 Crore. In the current fiscal, the subsidy given to the energy department in the present year is Rs 4500 crore.
The department is expected to get another 2000 Crore. The 1500 Crore revenue gap had to be filled with increasing the power tariffs or had to go for power cuts. But then no power cuts and no power tariff hikes is the political need of the TRS government.
