Audit Report of the Comptroller and Auditor General of India for the year ended 31 March 2023, Government of National Capital Territory of Delhi

The power subsidy went to nearly the entire domestic consumer base rather than to the deserving and disadvantaged, and the rationale for the 400-unit threshold covering about 80 per cent of domestic consumers was not found on record.

“Audit observed that the subsidy policy of GNCTD for the power sector did not target the deserving and disadvantaged section of the population and paid it to nearly the entire domestic consumer base... The rationale for having a high threshold value of 400 units of consumption, which covered approximately 80 per cent of domestic consumers, was not found on record.”Overview

The more electricity a household used, the more subsidy it received — over 30 lakh consumers in the 0-200 unit bracket got about ₹6,000 a year each, while about 16.60 lakh using more than 200 units got over ₹10,000, roughly 70 per cent more per connection.

“Audit observed that the actual subsidy outgo per consumer was much higher for higher consumption bracket consumers. More than 30 lakh consumers, within the 0 to 200 unit consumption bracket, received an average per connection subsidy of ₹ 6,000 per annum, whereas approximately 16.60 lakh consumers, with consumption of more than 200 units, received approximately 70 per cent higher average subsidy per connection of over ₹ 10,000 per annum.”Overview

Subsidy was paid on connections that consumed nothing at all — ₹17.81 crore to over 50,000 consumers with zero consumption for more than 12 months, ₹11.88 crore to more than 90,000 with zero consumption for six to eleven months, and ₹12.57 crore to over 1.70 lakh with zero consumption for three to five months.

“More than fifty-thousand consumers had continuously zero consumption for more than 12 months and were provided a subsidy of ₹ 17.81 crore, more than ninety thousand consumers received a subsidy of ₹ 11.88 crore for continuously zero consumption for 6 to 11 months and more than 1 lakh 70 thousand consumers had continuous zero consumption for periods between 3 and 5 months and received subsidy of ₹ 12.57 crore.”Overview

The power subsidy rose 31 per cent in three years, from ₹2,405.59 crore in 2019-20 to ₹3,161 crore in 2022-23, and made up between 66.96 and 70.39 per cent of all subsidy — subsidies together being nearly a tenth of Delhi's revenue expenditure.

“In 2019-20, an amount of ₹ 2405.59 crore was given as power subsidy, which subsequently increased by 31 per cent in three years and became ₹ 3161 crore in 2022-23... Subsidies constituted nearly 10 per cent of GNCTD's total revenue expenditure. Power subsidy alone accounted for 66.96 to 70.39 per cent of the total subsidy during 2019-20 to 2022-23.”Overview

Tariffs have not risen since 2014-15, so unrecovered cost has accumulated on the DISCOMs' balance sheets as regulatory assets — ₹9,063 crore in 2019-20, ₹27,200.37 crore by 31 March 2021.

“Tariffs have not been increased after 2014-15 and so the present tariff has not reflected the actual cost of power procurement and distribution. This mismatch between cost and recovery led to continuous accumulation of unrecovered expenses, which have been trued-up as "Regulatory Assets" year after year appearing in the balance sheet of the DISCOMs as an asset... The Regulatory Assets of Delhi DISCOMs, which stood at ₹ 9,063 crore in 2019-20, has arrived at ₹ 27,200.37 crore as of 31 March 2021.”Overview