Chennai, India – The excess reliance of the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) on the State government for financial support has been brought to light once again—this time, through the State Finances Audit Report for Tamil Nadu by the Comptroller and Auditor-General of India (CAG). In the 14 years since 2013-14, government aid, both in the form of tariff subsidy and grants, has accounted for ₹2.55 lakh crore. If the final figures for 2024-25 are compared with those for 2013-14, the growth was a whopping 451%, as only revised estimates for 2025-26 and 2026-27 are available. On average, the annual assistance is around ₹18,130 crore.
Since 2021-22, the State government has been mandated to absorb the losses of the power discom fully, making its financial condition shaky. A perusal of the data reveals that the aggregate figure of tariff subsidy and grants exceeded the five-digit mark in 2016-17, when the scheme for providing free electricity of up to 100 units to domestic consumers was launched. Five years later, the 100% absorption of the financial loss of the discom came into effect in the wake of the power utility having been sanctioned assistance of about ₹30,230 crore in 2020 under the Central government’s COVID-19 liquidity infusion scheme.
As the gap between the average cost of supply and the average revenue realised has narrowed, thanks to the liberal assistance of the government, and it is likely to turn positive this year, the TNPDCL may not be getting as much aid through grants as it had been receiving. Yet, ₹5,000 crore has been earmarked towards grants for the current year, in addition to tariff subsidy. Out of the subsidy figure of about ₹18,860 crore this year, nearly ₹9,893 crore, accounting for 53%, is set aside for domestic consumers, who are being given free electricity of up to 200 units, subject to overall consumption not exceeding 500 units bi-monthly.
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To make matters worse for the State government, the Supreme Court’s direction last year of having to recover regulatory assets requires the government to shell out as grants a sum of ₹11,800 crore per year for five years (2026-27 to 2030-31), totalling ₹59,000 crore. Alternatively, the amount can be recovered as enhanced consumption charges. However, the Tamilaga Vettri Kazhagam-led government has said that it will not go in for an upward power tariff revision. In such a case, it is the State government that has to bear the additional stress.
