New Delhi: Delhi’s flagship free electricity scheme, which has long supported household budgets, is now placing unprecedented pressure on the government’s finances. Official data shows that electricity subsidy expenditure may cross ₹4,200 crore in the 2025–26 fiscal year, prompting the Power Department to seek an additional ₹361 crore in the revised budget merely to clear pending dues.
How Did the Subsidy Burden Rise So Sharply?
Government records reveal that in 2015–16, Delhi’s electricity subsidy outlay was just ₹1,442 crore. Over the next decade, this figure has grown more than threefold, touching between ₹3,600 crore and ₹4,200 crore annually.
A year-by-year snapshot highlights the steep rise:
- 2015–16: ₹1,442 crore
- 2016–17: ₹1,578 crore
- 2017–18: ₹1,677 crore
- 2018–19: ₹1,699 crore
- 2024–25: approx. ₹3,600 crore
- 2025–26 (estimated): over ₹4,000 crore
This consistent upward trajectory, officials say, is closely tied to the rapid increase in the number of electricity consumers and the structure of the subsidy itself.
Why the Subsidy Base Keeps Expanding
Delhi has 69 lakh electricity consumers, and 83% of them fall under the domestic category—the segment that receives the maximum subsidy support.
In 2015–16, the consumer count was 52.6 lakh. Over 10 years, Delhi has added nearly 16 lakh new consumers, significantly increasing total subsidy payout.
How Delhi’s Free-Power Formula Works
The subsidy model operates on consumption slabs:
- 0–200 units: Zero electricity bill
- 201–400 units: 50% subsidy, capped at ₹800
- Above 400 units: No subsidy
This means households consuming between 200–400 units—a rapidly growing category—contribute the most to rising subsidy totals.
Why the Power Department Needs an Extra ₹361 Crore
The Delhi government had allocated ₹3,849 crore for electricity subsidy in the current fiscal year—about ₹250 crore more than last year.
However, the Power Department says this amount is insufficient to clear outstanding payments, requiring an additional ₹361 crore.
If approved, the total subsidy bill could reach about ₹4,200 crore this year.
This demand will now be placed before the Delhi Assembly in the Winter Session.
A Successful Welfare Model or a Long-Term Fiscal Risk?
Delhi’s free electricity program has undeniably created a new governance model that other states have observed closely. But with costs rising sharply every year, financial experts and policymakers are increasingly asking:
Can the subsidy continue at this scale in the long term?
Is the model fiscally sustainable without adjustments?
The upcoming Assembly session may offer the first substantive answers.
