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Restructuring of electricity tariffs need to happen sooner than later: Finance secretary

Restructuring of electricity tariffs in Tamil Nadu needs to happen sooner than later and people should be ready to pay for drinking water supply which can be monitored through smart metering systems, Finance Secretary S. Krishnan said.

Speaking during a panel discussion on the Tamil Nadu Budget 2020-21 organised by the Madras Institute of Development Studies, Mr. Krishnan said the government was not comfortable with the expenditure situation and subsidies in utilities, especially the electricity board. “Some of our electricity consumption subsidies are clearly unsustainable. The restructuring of electricity tariffs needs to happen sooner than later,” he said.

He said the issue of electricity being given to the farm sector also needed to be addressed and this was an issue that none of the political parties even wanted to speak about.

Mr. Krishnan said domestic consumption was a much larger issue. “On power being given to farms, you can say it is going for something productive. [But] there is no reason why anyone in this audience needs to be given 100 units of electricity free. It just does not make sense. We are losing on an average ₹6.70 to ₹7 per unit on domestic consumption,” he said.

He further said people should be prepared to pay for drinking water supply as well. “It is currently in a model that is subsidised…actually subsidised for the rich. If you live in a bungalow on Boat Club Road, you pay ₹50 per month for whatever quantity of water you consume without any billing. You might have six bathrooms, you might be washing four cars and you just pay ₹50. But actually some people living in the slums might be carrying just puddles of water everyday and that is probably costing them ₹10 a day. Clearly the subsidy is going to the rich,” he said.

He said there is a need for smart metering and it has to be addressed and is inevitable. “It is vested interests which is preventing this from happening,” Mr. Krishnan said.

He said there has been a 1-1.5%-drop in commercial tax revenue collection and that was worrisome. He also hoped that it would increase as consumption rises. He said there was scope to raise tax revenues through property tax.

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