The Political Implications of Electricity Tariff Hikes in Kashmir

New Delhi, India Aug 27, 2026 ALN: There was a time in Kashmir when an increase in electricity tariff was not buried in tables of an Aggregate Revenue Requirement or explained through regulatory jargon. It could bring Srinagar to a halt.

The summer of 1988 remains its starkest reminder. A hike in electricity rates by the Farooq Abdullah Government triggered a traders’ protest that rapidly grew into a wider agitation. On June 10, a city-wide bandh turned violent across Khanyar, Bohri Kadal, and Zaina Kadal. Contemporary reporting recorded clashes, tear-gas, and police firing in which three civilians were killed that day; later accounts put the toll during the wider agitation even higher.

The episode left successive governments with a lesson they would not easily forget: power tariff was politically combustible. A hike could unite households, traders, and businesses in protest and hand the opposition a potent weapon against the government of the day. Electricity pricing therefore became as much a political calculation as an economic one.

An anecdote my father often narrated captures how the matter was politically charged even in the 1960s and early 1970s. He recalled a towering political leader telling a public gathering at Eidgah, Srinagar, that if electricity linemen came with ladders to disconnect supply, people should pull away their ladders. It shows that the resistance to electricity charges was already a potent instrument of popular mobilization and opposition politics, long before the dramatic tariff agitation of 1988.

For years thereafter, governments were reluctant to place rising power costs directly upon consumers. Tariffs remained frozen for long periods even as the cost of purchasing and supplying electricity rose. The deficit did not disappear; the Government largely carried it. Politically, absorbing the gap in the exchequer was often safer than allowing it to appear in household electricity bills.

Then came power-sector reforms and, with that, the J&K State Electricity Regulatory Commission. Tariff regulations were framed in 2005, and PDD filed its first tariff petition covering FY 2006-07 and 2007-08. After inviting objections and holding public hearings, JKSERC issued its first retail tariff order on March 28, 2007.

I happened to be heading a leading business chamber in Kashmir when the first tariff petition came before JKSERC. The process then was both elaborate and participatory. PDD would file its petition, following which our organization would study the proposals and submit detailed objections on various technical, financial, and consumer-related aspects. The objections received from stakeholders were forwarded by the regulator to the department for its response. Before the public hearing, PDD’s replies were shared with the respective organizations and objectors, who were given a further opportunity to file written rebuttals and contest the department’s claims during the hearing.

We filed voluminous written objections to that first petition, and thereafter scrutinizing tariff petitions and preparing detailed responses became almost an institutional routine. Even after leaving the leadership of the organization, I continued attending most of the regulator’s public hearings. I have therefore watched at close quarters the transformation of tariff determination from a politically administered exercise into an elaborate regulatory process—one that, at least in its earlier years, allowed informed stakeholder participation at every important stage.

That transformation was important. PDD could regularly place its expenditure, power-purchase requirements, and Aggregate Revenue Requirement before the regulator without the Government necessarily insisting that the entire gap be recovered through higher consumer tariffs. In several years, ARR petitions were filed, but tariff increases did not follow. Governments remained conscious of the wider economic and public consequences of raising electricity bills.

Even when tariff hikes were proposed, the regulator did not invariably grant everything that was sought. Earlier tariff orders make particularly interesting reading today because they record detailed prudence checks and discussions on disallowances, power-purchase costs, establishment expenditure, distribution losses, operational efficiency, consumer interests, and the need to avoid “tariff shock.”

In 2013-14, for instance, PDD proposed an average domestic increase of about 10% and an overall increase of 13.53%. JKSERC restricted these to roughly 8% and 8.5% respectively, expressly considering tariff shock. The domestic slabs then stood at ₹1.54 for the first 100 units, ₹2.00 for the next 100, ₹3.00 for 201-400 units, and ₹3.20 thereafter.

The pattern repeated in 2016. PDD sought considerably steeper increases, including around 23% for domestic consumers, but JKSERC eventually approved an average hike of around 10%. The principal domestic slabs moved only to ₹1.69, ₹2.20, ₹3.30, and ₹3.52. The Commission also noted that tariffs had not been increased during the preceding two years and that the Government had reduced electricity duty from 22% to 10%.

Even the substantial revision in 2023 demonstrated continuing political sensitivity. The Government simultaneously withdrew the 15% Electricity Duty, explicitly seeking to neutralize the effect of the tariff revision on the final consumer bill. An official illustration then showed that a domestic consumer using 500 units would actually pay marginally less after the withdrawal of the duty despite the revised tariff.

And then came JERC Order No. 06 of 2026 dated August 20, 2026. The Government-supported proposal before JERC contemplated a 5% increase across the board. JERC ultimately determined tariffs yielding an overall 6.83% increase in tariff revenue. Domestic rates consequently moved from ₹2.30 to ₹2.45 per unit up to 200 units, ₹4.00 to ₹4.20 for 201-400 units, and ₹4.35 to ₹4.60 above 400 units, besides higher fixed charges. The increase in industrial tariff has shockingly been made to nearly 10%.

What deserves particular attention this time is not merely the increase but the regulatory philosophy behind it. Earlier orders were notable for rigorous examination of power-purchase projections, establishment expenditure, distribution losses, collection efficiency, and other costs, with claims questioned or curtailed wherever considered excessive or unsupported.

Nobody can reasonably argue that legitimate power-purchase, network, or establishment costs should not be recovered. But that is precisely why an independent regulator stands between the utility seeking money and the consumer expected to pay it. Its task is not merely to determine how a revenue gap should be filled, but how much of that gap should exist in the first place.

That question becomes sharper when the DISCOMs came with a Government-supported proposal of 5% across the board, while JERC ultimately determined tariffs yielding 6.83% additional revenue with almost double the demand to increase for industry. The regulator undoubtedly has the statutory authority to differ from the utilities. But regulatory independence should ordinarily mean greater scrutiny, not a greater burden than even the applicant sought without compelling justification.

Why have power tariff hikes historically provoked such strong reactions in Kashmir? To dismiss this as an unwillingness to pay—as some political and public commentary does—is both simplistic and insensitive.

A large section of the population does not live on assured government salaries. Families depend on small trade, handicrafts, horticulture, agriculture, tourism, transport, construction, and daily labor—occupations that are seasonal and uncertain. A worker may find no work, an artisan no order, and a shopkeeper no customers; the electricity bill, however, has no lean season. It arrives in full.

Kashmir’s prolonged winter adds another burden. Households must spend heavily on heating, warm clothing, bedding, and other necessities simply to withstand the cold. Electricity is therefore no longer merely about lighting and appliances; increasingly, it is about warmth and survival.

There is also an irony: the snow that makes winters so difficult eventually melts into the rivers that generate hydropower in J&K. People therefore reasonably expect some benefit from these waters in the form of affordable electricity.

The historical tariff numbers reinforce the point. A household consuming 200 units incurred about ₹354 in energy charges under the 2013-14 tariff structure. From September 2026, the same consumption costs about ₹490, nearly 38% more. For the first 100 units, the applicable rate has risen from ₹1.54 to ₹2.45—an increase of about 59%. Fixed charges have also risen from ₹5/kW in the earlier structure to ₹10/kW now. These increases did not occur every year. The history is instead one of long pauses followed by step increases, and those pauses tell their own story. Governments frequently preferred to carry more of the deficit rather than place it immediately upon households.

Nobody should romanticize the tragedy of 1988 or suggest that tariff disputes belong on violent streets. The lesson of Bohri Kadal is precisely the opposite: human life is infinitely more valuable than any electricity tariff.

But history does leave us with a warning.

Earlier, a power hike had to survive the street. Today it has to survive the regulator. Eventually, however, it must still survive the household.

From Bohri Kadal in 1988 to JERC’s 334-page Order No. 06 of 2026, the process has changed almost beyond recognition. The street slogan became a tariff petition; the political announcement became an ARR; the Government decision became a regulatory determination.

Yet at the end of those 334 pages stands the same person who stood there four decades ago—the consumer, electricity bill in hand, with a limited income from which to pay it.

The question therefore is neither whether electricity should be free nor whether tariffs can never rise. It is simply this: Before asking an honest consumer to pay more, have the utilities and the regulator exhausted every possibility of making the system cost less, lose less, and collect better?

If not, the arithmetic may have become regulatory, but its consequences remain profoundly human.

Shakeel Qalander, prominent business leader and a civil society animator