Punjab Govt Hikes Fuel Prices, Withdraws Power Subsidy Amid Financial Strain

GG News Bureau
Chandigarh, 9th Sept. The Punjab cabinet, led by Chief Minister Bhagwant Mann, announced on Thursday a hike in fuel prices and the withdrawal of a power subsidy scheme. Petrol prices will increase by 61 paise per litre, while diesel prices will rise by 92 paise per litre. This decision is part of the state’s broader strategy to address significant financial constraints.

Additionally, the government has revoked the power subsidy for domestic consumers with up to 7KW load, a scheme originally introduced by the Charanjit Singh Channi-led Congress government in 2021. The subsidy, which provided discounted electricity rates, is being eliminated to save an estimated ₹392 crore annually. However, the Aam Aadmi Party (AAP) government will continue to provide 300 units of free electricity per month.

These measures come amid Punjab’s worsening financial situation, with the state’s debt projected to reach ₹3.74 lakh crore by the end of the 2024-25 fiscal year. The AAP government’s decision follows a bailout request of ₹1.32 lakh crore from the 16th Finance Commission and criticism over its spending on subsidies.

In addition to the fuel price increase and power subsidy withdrawal, the Punjab government has also raised the value-added tax (VAT) on petrol and diesel, increased property registration rates, and hiked motor vehicle taxes. The cabinet also discussed a draft agriculture policy to address depleting groundwater levels.

Chief Minister Mann is scheduled to meet with representatives from the Bharti Kisan Union (Ekta-Ugrahan) and the Punjab Khet Mazdoor Manch later in the day to discuss these issues further.