The total tariff subsidy provided to the Electricity Department was ₹15,772 crore for 2024-25. | Photo credit: FILE PHOTO
The Tamilaga Vettri Kazhagam (TVK) government’s announcement of 200 units of free power for domestic consumers who use less than 500 units in two months will further increase the state’s annual subsidy burden by nearly ₹2,000 crore.
A government order issued on Sunday by the Ministry of Energy announced a free electricity scheme with a capacity of 200 units. It also announced an additional tariff subsidy burden of ₹1,730 crore to be compensated to the Tamil Nadu Power Distribution Corporation Limited (TNPDCL). With this, the annual tariff subsidy for domestic consumers could cross ₹ 10,100 crore this fiscal, according to power executives.
The distribution of the subsidy burden of ₹10,100 crore on account of ₹2.45 crore domestic consumers would be ₹9,100 crore for those consuming up to 500 units covering 200 spare units in two months and ₹1,000 crore for 100 units consuming more than ₹500 crore.
According to the Power Ministry’s policy note for 2025–26, the total tariff subsidy given to the electricity department was ₹15,772 crore for 2024–25. This included subsidizing 2.45 million domestic consumers, including those consuming more than 500 units, shantytowns, three-phase agricultural consumers and power looms with 1,000 spare units in two months.
A senior TNPDCL official said the major portion of the subsidy of ₹15,772 crore covered 100 units free of cost to domestic consumers. This worked out to nearly ₹8,500 crore annually.
As per the Electricity Tariff Ordinance 2025, the bimonthly charge for zero-400 units is ₹4.95 per unit and the government has covered the entire load of ₹4.95 for domestic consumers of ₹2.45 crore. In the next slab of 101-200 units, the rate was ₹4.95 per unit. However, consumers were charged only ₹2.35. The rest was compensated by the government. Since the new government announced 200 units free for domestic consumers using up to 500 units, it would have to bear the entire burden of ₹9.90 per unit for 2.20 lakh out of 2.45 lakh consumers. This does not include 20 lakh consumers who use more than 500 units in two months, according to data submitted by the Tamil Nadu Electricity Regulatory Commission. The subsidy per 100 units will be covered for 20 million consumers.
Published – 10 May 2026 23:18 IST
