Punjab's politics of free electricity and subsidies has become one of state's most debated issues and while many people believe former CM Parkash Singh Badal started the free power culture historical records show that the first free electricity scheme was introduced by former CM Rajinder Kaur Bhattal however it was Badal who expanded the scheme to all farmers and turned it into a long-term political policy that every government has largely continued.
The first free electricity subsidy for farmers was introduced in December 1996 by Congress government led by Rajinder Kaur Bhattal who was also Punjab's first woman Chief Minister.
Under this scheme:
Free electricity was provided only to small and marginal farmers.
The benefit was available to farmers owning up to seven acres of land.
Farmers with larger landholdings were required to pay a flat rate of ₹50 per brake horsepower (BHP) for their agricultural tube wells and the scheme was announced shortly before 1997 Assembly elections and was designed as targeted relief rather than a universal subsidy.
After Shiromani Akali Dal won 1997 Assembly elections Parkash Singh Badal became CM in February 1997 and one of his first major decisions was to remove landholding limit from free electricity scheme.
Under the new policy:
Every farmer became eligible for free electricity.
Rich and poor farmers received the same benefit.
Agricultural tube wells across Punjab were covered.
This blanket subsidy made free electricity a permanent feature of Punjab politics and significantly increased the financial burden on state, because of this expansion many people remember Badal as the leader who introduced free power even though the first scheme had been launched earlier by Bhattal.
The subsidy continued under successive governments and later when Captain Amarinder Singh became Chief Minister in 2002 his government tried to reduce financial burden by charging agricultural consumers ₹60 per BHP from October 2002 however the move faced political pressure and free power scheme returned in 2005, later governments also continued the subsidy instead of ending it.
Over the years the subsidy bill has increased sharply and according to official data reported by multiple publications: In 1997-98 Punjab spent around ₹604.5 crore on agricultural power subsidy and by 2022-23 the agricultural subsidy alone had crossed ₹10,000 crore, the cumulative cost of free power over nearly three decades has crossed ₹1 lakh crore and the growing subsidy bill has become one of state's biggest recurring expenses.
After coming to power in 2022 Aam Aadmi Party government led by Bhagwant Mann expanded subsidy model beyond agriculture and the government introduced: Up to 300 units of free electricity per month for eligible domestic households and the scheme became one of AAP's key election promises and was implemented from July 2022. With this move Punjab's subsidy model expanded from mainly supporting farmers to providing relief to a large section of residential consumers as well.
Supporters of the subsidy system argue that: Free electricity reduces the financial burden on farmers while household consumers save money on monthly bills and the schemes provide direct welfare benefits to ordinary families meanwhile critics however argue that: Rising subsidy bills put pressure on Punjab's finances and large recurring expenditure leaves less money for infrastructure and development, universal subsidies also benefit wealthy consumers instead of only those who need support.
The debate continues among economists, political parties and policy experts but no major government has completely withdrawn the schemes because they remain politically popular.
Based on historical government decisions and documented records: Rajinder Kaur Bhattal introduced Punjab's first free electricity scheme in December 1996 but it was limited to small and marginal farmers with up to seven acres of land and later Parkash Singh Badal expanded the scheme in 1997 by removing landholding limits and making free electricity available to all farmers turning it into a permanent and universal policy that shaped Punjab's political and economic landscape. Bhagwant Mann later widened the subsidy model by introducing up to 300 units of free electricity for eligible domestic households taking Punjab's welfare policy beyond agriculture.