₹8,863 crore loss, ₹49,500 crore debt: Is Gruha Jyothi scheme pushing Karnataka’s power companies into crisis?

State-run electricity companies report massive losses and mounting debt in 2024–25, sparking concerns over tariff hikes, with FKCCI strongly opposing any increase that could burden industries and consumers.

Karnataka’s ambitious Gruha Jyothi scheme, aimed at providing free electricity to households, is now emerging as a major financial burden on the state’s electricity distribution companies. During the financial year 2024-25, the five power companies in the state collectively recorded a staggering loss of ₹8,863 crore and accumulated total debt of around ₹49,500 crore, pushing them into deep financial stress.

The companies affected include BESCOM, HESCOM, CESCOM, JESCOM, and MESCOM. Among them, BESCOM has suffered the highest loss and carries the largest debt burden. Data shows that BESCOM alone reported a loss of ₹5,476 crore and holds loans of nearly ₹22,000 crore. HESCOM follows with ₹1,500 crore in losses and ₹11,000 crore in debt. CESCOM recorded losses of ₹1,030 crore and debt of about ₹5,200 crore, while JESCOM reported ₹766 crore in losses and ₹8,500 crore in loans. MESCOM, though comparatively smaller, still faced losses of ₹96 crore and a debt burden of ₹2,800 crore.

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Officials attribute the growing financial pressure to multiple factors, including the implementation of welfare schemes, rising operational costs, and delayed reimbursements. With losses mounting year after year, discussions have begun on increasing electricity tariffs to balance the books.

However, the proposed tariff hike has met strong resistance from the Federation of Karnataka Chambers of Commerce and Industry (FKCCI). The industry body has warned that any increase in electricity rates will not only affect household consumers but will significantly burden industries, especially small and medium-scale units. FKCCI stated that industrial consumers usually face higher tariff hikes, which could hurt manufacturing, raise production costs, and impact employment. Therefore, the organization has firmly opposed any move to increase power tariffs to compensate for the companies’ financial losses.

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Adding to the concern, the Comptroller and Auditor General (CAG) has already flagged the failure to collect improvement charges, highlighting revenue leakages in the system. Experts believe that better financial management and efficient recovery mechanisms are crucial to prevent further deterioration.

As the financial health of Karnataka’s electricity companies continues to weaken, the challenge before the government is to sustain welfare commitments like the Gruha Jyothi scheme without shifting the burden onto consumers and industries.