Exploring Effective Measures for Electricity Bill Relief

In a recent article published in the Dawn newspaper, a range of suggestions aimed at providing relief on electricity bills was discussed in the emergency meeting summoned by the Prime Minister. One notable proposal involved the option to pay bills in installments. While this idea may seem plausible at first glance, a closer examination reveals certain challenges and complexities that make it unworkable.

To illustrate this, let’s consider a hypothetical scenario: a monthly income of Rs 30,000 and a bill of Rs 12,000. In this case, 50% of the bill payment is deferred to the following month. The subsequent month brings a bill of Rs 10,000, with another 50% deferred. As a result, the individual ends up with a bill of Rs 11,000 to be paid in that month. This cycle continues, potentially leading to financial strain. The suggestion raises questions about its long-term sustainability, its potential impact on an individual’s financial stability & ability to pay.

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Currently, incomes up to Rs 12 lakh per year are exempt from taxation.  Rates for non-filers mean an additional tax head built in the electricity bill. However, the mechanism to differentiate between individuals earning below 12 lakhs per year and those earning above 12 lakhs per year, both being non-filers & eligible to pay the non-filer tax on bill remains unclear. This lack of clarity underscores the need for a more refined approach that aligns taxation policies with electricity billing.

A critical point to consider is the tiered pricing structure based on electricity consumption. This structure employs a multiplier effect, resulting in higher rates for increased consumption. To promote fairness and transparency, it might be prudent to introduce a flat rate for electricity usage at initial units usage. This adjustment not only simplifies billing but also contributes to a reduction in taxes for consumers.

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Addressing the issue of losses incurred by the Ex-Wapda distribution companies (XWDISCOs) is of paramount importance. These companies face annual losses of Rs 150 billion due to electricity theft, line losses, and inadequate recoveries. Rather than perpetually transferring these losses onto paying consumers, it is imperative for the government to prioritize solutions that target these underlying issues directly. By focusing on prevention and accountability, the burden on law-abiding consumers can be alleviated. (Express Tribune, 2022) The solution of these issues has been ignored traditionally passing on the deficit to the bill payers.

Ultimately, it is incumbent upon the government to tackle the root causes of losses in the electricity sector and present substantive measures that truly alleviate the burden on consumers. Without meaningful and effective solutions, the issue will persist, leaving citizens to navigate the same challenges without genuine relief.

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The sun rises over power lines near highway A4 between Waltershausen and Erfurt, Germany, February 6, 2019. REUTERS/Kai Pfaffenbach

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The writer is a lawyer, academic, and political analyst. She has authored a book titled ‘A Comparative Analysis of Media & Media Laws in Pakistan.’ She can be contacted at: yasmeenali62@gmail.com and tweets at @yasmeen_9

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