The decision was formalized by the Himachal Pradesh government after a cabinet meeting, and the new tariff regime will be effective starting from the next billing cycle. Domestic consumers will continue to benefit from the subsidy, but only for the first 300 units of usage. This replaces the earlier system where subsidies extended beyond this limit. The cap, therefore, marks a tightening of benefits, especially for those consuming higher amounts of electricity.
Industrial consumers, on the other hand, will no longer receive subsidies. They had previously enjoyed a reduction of Re 1 per unit, which will no longer be available under the revised policy. The move has sparked concern among industry representatives, who argue that the higher electricity costs could impact overall operational expenses, especially for energy-intensive sectors like manufacturing.
Chief Minister Sukhvinder Singh Sukhu emphasized that the decision aligns with the state's long-term fiscal planning. The government faces the challenge of balancing subsidy expenses while managing the rising demand for electricity across domestic, commercial, and industrial sectors. The subsidy reduction, aimed primarily at industrial consumers, is seen as a step towards more efficient use of state resources.
It is estimated that this policy change will affect approximately 20 lakh consumers, many of whom had previously benefitted from lower tariffs. The reallocation of subsidies is expected to ease some of the financial burden on the state, with officials noting that the funds saved will be redirected toward other priority areas, including infrastructure development and healthcare.
The industrial sector, however, has voiced concerns about the long-term implications of higher tariffs on their competitiveness. As Himachal Pradesh is home to a growing number of industries, including pharmaceuticals, cement, and electronics, representatives from various sectors have urged the government to reconsider or offer alternatives, such as phased tariff increases, to avoid sudden cost shocks. Despite these concerns, the government remains committed to the new policy, which it believes will create a more sustainable financial model for the state's energy distribution.
The shift in electricity subsidies comes as part of broader reforms being implemented across multiple sectors in Himachal Pradesh, as the state grapples with increasing financial liabilities. While the exact details of the reallocation of funds remain to be seen, the government has assured that vulnerable groups, including Below Poverty Line (BPL) and Antyodaya families, will continue to receive targeted financial support.