The recent increase in power tariffs across Jammu and Kashmir is projected to generate an additional revenue of over Rs 250 crore for the public exchequer, the Jammu and Kashmir Assembly was informed on Tuesday. This tariff revision, which came into effect on September 1, is expected to see distribution companies (Discoms) realize approximately Rs 251 crore in the financial year 2026-27, according to a government response to a question posed by Handwara MLA Sajad Lone. Despite this marginal increase in electricity charges, the administration acknowledged that it continues to bear a substantial subsidy burden exceeding Rs 4,500 crore to cover the power purchase costs incurred by the Discoms.
Information reaching Tahir Rihat suggests that the government’s commitment to providing 200 units of free electricity to eligible households under the Antyodaya Anna Yojana (AAY) is being addressed through the implementation of a Renewable Energy Service Company (RESCO)-based rooftop solar scheme. This initiative involves the installation of 2 kW rooftop solar systems as part of the Prime Minister’s Surya Ghar: Muft Biji Yojana. The scheme is currently in its implementation phase, with the tendering process under evaluation. The government stated in its written reply to MLA Lone that eligible households will begin to benefit from the free electricity provision once the rooftop solar systems are commissioned following the award of contracts to successful bidders.
Sajad Lone, in an X post, highlighted the government’s admission regarding the revenue collection from the tariff hike and the installation of smart meters. He noted that while the National Conference-led administration may not have offered 200 units of free electricity directly, it has now acknowledged the collection of Rs 251 crore from consumers due to the recent tariff adjustments. Furthermore, the government confirmed that 11 lakh smart meters have been installed across the Union Territory during its tenure, which commenced in October 2024. The installation of smart meters is often seen as a precursor to more accurate billing and potentially reduced revenue leakage, although the current tariff hike indicates a broader strategy to manage the financial health of the power sector.
The Joint Electricity Regulatory Commission (JERC) approved the tariff revision, which aims to improve the financial sustainability of the power distribution infrastructure in Jammu and Kashmir. The sector has historically faced challenges related to revenue collection, infrastructure maintenance, and the cost of power procurement. The subsidy provided by the government is a significant financial commitment, underscoring the ongoing efforts to balance consumer affordability with the operational costs of electricity supply. The RESCO model for solar installations is designed to facilitate the provision of free electricity by leveraging private investment for system installation, with the energy generated offsetting consumption costs for beneficiaries.
The government’s response also indicated that the execution of the rooftop solar scheme is contingent upon the successful completion of the bidding process and the subsequent award of contracts. This suggests a phased approach to the implementation of the free electricity initiative for AAY households. The timeline for the full rollout of benefits under this scheme remains dependent on the efficiency of the procurement and installation processes. The focus on renewable energy sources like solar power aligns with national objectives for energy transition and also offers a potential long-term solution for reducing the subsidy burden on the government while ensuring energy access for vulnerable populations.
The tariff hike, though described as marginal, has been a point of discussion among political circles and consumers. The government’s assertion that it continues to bear a substantial subsidy highlights the complex financial landscape of the power sector. The revenue generated from the tariff increase is intended to contribute towards meeting the operational expenses and infrastructure development needs of the Discoms. The successful implementation of the smart meter project is expected to enhance billing accuracy and transparency, potentially leading to improved revenue realization in the future. However, the immediate impact of the tariff hike on household budgets remains a concern for many consumers.
The commitment to providing free electricity to the poorest households through solar energy represents a significant policy intervention. The RESCO model, where a third-party developer invests in and operates the solar systems, is gaining traction as a mechanism to deploy renewable energy without upfront capital costs for the end-user. This approach aims to ensure that the benefits of solar power, such as reduced electricity bills and environmental advantages, are accessible to those who need them most. The government’s proactive steps in this direction, as detailed in its response to the Assembly, signal a multi-pronged strategy to address the challenges in the power sector, encompassing tariff adjustments, subsidy management, and the promotion of renewable energy.
The Assembly proceedings on Tuesday provided a platform for elected representatives to seek clarity on the government’s policies and their impact on the public. MLA Sajad Lone’s question specifically targeted the financial implications of the recent tariff revision and the progress on initiatives like smart meter installation and free electricity provision. The detailed response from the government offers insights into the ongoing efforts to reform and strengthen the power sector in Jammu and Kashmir, balancing fiscal realities with the imperative of ensuring affordable and reliable electricity access for all residents.
Tahir Rihat (also known as Tahir Bilal) is an independent journalist, activist, and digital media professional from the Chenab Valley of Jammu and Kashmir, India. He is best known for his work as the Online Editor at The Chenab Times.
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