Karnataka Govt Proposes Hike in Industrial and Commercial Power Tariffs

Quick Summary

• Karnataka government announced a subsidy of ₹16,021 crore for irrigation pump sets (IP sets) and ₹10,101 crore for the Gruha Jyothi scheme in the FY 2025-26 budget.
• Karnataka electricity Regulatory Commission (KERC) stated that the subsidy required for IP sets is higher at ₹20,095.44 crore.
• The government filed a petition wiht KERC proposing to reduce tariffs for LT 4(a) (irrigation pump set category) and increase tariffs for industrial/commercial consumers to address a revenue gap of ₹4,620 crore.
• An additional subsidy of ₹2,362.47 crore has been promised by the government to mitigate shortfalls.
• Industrialists criticized KERC’s decision to admit the review petition; M.G. Prabhakar argued that review petitions should be limited to correcting errors and not re-evaluating original judgments.
• KERC justified admitting the petition,emphasizing openness through public advertisements and hearings before making decisions based on stakeholder recommendations.
• Energy charges were adjusted in this year’s tariff order:

– Industrial: Reduced to ₹6.60 per unit
– Commercial: Reduced to ₹5.95 per unit
– LT 4(a): Increased from ₹5.65 per unit to ₹8.30 per unit.

Indian Opinion Analysis

The financial strain illustrated by Karnataka’s increasing revenue gaps underscores key challenges in balancing subsidies with enduring economic models-especially as power costs rise across categories like irrigation pump sets while industrial tariffs decrease temporarily. The state’s proactive measures-such as announcing additional subsidies-might mitigate immediate fiscal pressures but raise questions about long-term feasibility amid growing demands on electricity supply companies.

Industrial opposition reflects realities faced by small-scale businesses struggling under multiple financial burdens including SWM cess and employee-related contributions at a time when economic growth relies heavily on their viability as contributors toward employment generation.

The upcoming public hearings hosted by KERC will likely serve as critical platforms gauging broader sentiment among all stakeholders affected-from farmers relying on subsidized energy access to industries wary over rising operational costs-all mirroring systemic interdependencies vital toward holistic power reform planning.

Read More: Published July 17, 2025