Power Minister R K Singh is right to speak out against political parties promising free power, especially if states are unable to afford compensating discoms for the loss in revenue. The financial implications of doling out free power are immense, undermining a state's ability to provide critical services such as health, education and basic infrastructure. Giving free power imposes intergenerational costs in terms of exacerbating water scarcity and deterioration of air quality.

Free power distorts demand, discourages efficient use and resource management, creating barriers to critical reforms like eliminating cross-subsidy of domestic and agricultural users by commercial and industrial users. This is a key reason for the limited electrification of the industrial and commercial sectors. The need to minimise emissions and India's commitment to transition to a net-zero economy by 2070 require massive electrification of the economy. Eschewing free power is not anti-poor. Electricity-poor households can be supported through direct benefit transfers or prepaid meters. The GoI-appointed expert group's draft National Electricity Policy, currently being examined by the power ministry, categorically opposes free electricity for consumers. Instead, it suggests fixing concessional tariffs (not below 50% of the discom's average cost of supply) for consumers with monthly consumption below 50 kWh and connected load up to 1 kW. Rather than giving the subsidy to the discom, the expert group proposed the subsidy be paid as a direct benefit transfer to eligible consumers.

India needs greater electrification of its economy. It must create the conditions that encourage this. The reckless and indiscriminate promise of free power prevents that transition.