Define boundaries and state the fiscal costs of election freebies

livemint.com:

₹3.25 per unit for an individual household with a connected load up to 100 watts and monthly consumption up to 30 units. But the minimum monthly charge of ₹45 is roughly three times the cost of likely daily usage of a 40-watt light bulb over three to four hours. There is also a bulk supply provision for slum clusters (without a minimum charge per household), but those charges are often unfairly distributed between households within the cluster.

It could be argued that zero-pricing the first slab at low connected loads is the push poor households need to migrate to an individually metered legal connection to the grid. That then makes possible identification of the remaining (large) illegal connections and so getting rid of them altogether. This could potentially place utility distribution companies (Discoms) on a universal billing platform, as a secure basis for future revenue growth.

The current freebie on offer by one of the contesting political parties does not draw the boundaries to cover only low connected loads. The subsidy bill paid by Madhya Pradesh to Discoms in 2020-21 to cover revenue shortfalls was ₹20,371.61 crore, by far the highest among all states. In that context, an initial free slab for all consumers looks seriously infeasible.

Also on offer is a subsidy on liquefied petroleum gas (LPG) cooking fuel, capping the price for an LPG cylinder at ₹500. That is roughly a 50% subsidy. Currently, about 40% of the price of petroleum consists of central excise and state value-added tax (VAT) including dealer commission (petroleum products are outside the GST system).