An audit by the Comptroller and Auditor General (CAG) of India has flagged serious discrepancies in how the Delhi government distributes power subsidies, revealing that the scheme often benefits more affluent households while wasting crores on inactive accounts.

The report, covering the financial year 2022-23, shows that Delhi's power subsidy bill grew significantly, rising from ₹2,405.59 crore in 2019-20 to ₹3,161 crore in just three years.

The ‘Inverted’ Subsidy Problem

One of the most striking findings in the report is what auditors called an "inverted subsidy". The CAG found that the actual benefit per connection was much higher for those in higher consumption brackets.

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While over 30 lakh consumers in the lowest bracket (using 0 to 200 units) received an average annual subsidy of about ₹6,000 per connection, roughly 16.60 lakh consumers using more power received an average of over ₹10,000 per annum.

This means households with higher consumption received a 70% higher benefit than those using the least amount of electricity.

Furthermore, the audit noted that the government had no record or rationale for choosing the 400-unit threshold, which covers nearly 80% of all domestic users regardless of their socio-economic status.

₹42 crore wasted on ‘Locked’ connections

The audit uncovered that approximately ₹42.26 crore was paid out as subsidy to connections that showed zero electricity consumption for multiple months.

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Specifically, more than 50,000 consumers with zero consumption for over a year were provided a subsidy of ₹17.81 crore.

Over 90,000 consumers with zero consumption for 6 to 11 months received ₹11.88 crore.

Another 1.7 lakh consumers with zero consumption for 3 to 5 months received ₹12.57 crore.

The CAG labeled this expenditure "wasteful," as it serves no rational economic purpose to subsidize Connections that are inactive or dormant.

Mounting debt and future risks

The report also warned of a growing financial crisis due to stagnant electricity tariffs, which have not been revised since 2014-15. This has led to a massive buildup of "Regulatory Assets"—costs incurred by power companies that must be recovered from consumers in the future.

These liabilities soared from ₹9,063 crore in 2019-20 to ₹27,200.37 crore as of March 2021, posing a risk of future "tariff shocks" for residents.

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CAG’s recommendations to fix the issue

To fix these issues, the CAG recommended that the government:

* Target Deserving Beneficiaries: Use actual billing data to ensure money reaches the needy.

* Link to Sanctioned Load: Consider a limit of 3KW sanctioned load for the subsidy, which would save roughly ₹315 crore per year while still covering 91% of residents.

* Implement DBT: Explore moving to Direct Benefit Transfer to improve transparency and clear money trails.

* Review Other Categories: Assess subsidies given to lawyers' chambers and agricultural users to ensure they are actually reaching small-scale beneficiaries.