Free power is not as cheap as Mr Raghuraman thinks.

I had a really ‘insightful’ article to go with my coffee this morning. Shankar Raghuraman of the Times Insight Group wrote “Free power isn’t as costly as you think”

Shankar Raghuraman hasn’t got his basics right. His contention is that the figure of Rs 24,000 crore subsidy that Economic Survey quotes is exaggerated as “most states supply power to agricultural consumers only during off-peak hours”. The assumption is that the economic survey figures are calculated either using peak hour rates or as a weighted average of peak and off peak hour rates. He further says that “The figures take into account the average cost of each unit of power”. The fact is that the figure has nothing whatsoever to do with the average cost of each unit of power.

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