Punjab's Power Crisis: Who Switched Off the State's Growth Engine?

For decades, Punjab powered India's Green Revolution. Today, the state is increasingly struggling to power itself.
As summer demand peaks and paddy cultivation gears up, Punjab has been battling a serious electricity crisis in recent years. Multiple thermal units have gone off-work, power purchases from the national grid have surged, farmers are complaining of irregular supply, employees are protesting, and industries fear rising costs.
The immediate crisis may have unfolded under the Aam Aadmi Party (AAP) government, but the roots run much deeper. Years of delayed reforms, ageing infrastructure, mounting financial stress and administrative complacency under successive governments have steadily weakened Punjab's power sector. The result is a system that appears increasingly vulnerable precisely when the state's economy needs it the most.

Six Thermal Units Down During Peak Demand
Punjab's electricity system suffered a major blow when six units across state-run thermal plants went out of service, reducing available generation capacity by well over 1,800 MW during one of the hottest periods of the year. This forced the Punjab State Power Corporation Limited (PSPCL) to purchase expensive electricity from the national grid to bridge the shortfall.

Power purchased from exchanges is significantly more expensive than generating electricity from existing plants, increasing financial pressure on an already stressed utility. Reports indicate PSPCL has bought electricity at prices touching ₹10 per unit during the current crisis.
The obvious question is: Why was Punjab left so exposed during peak agricultural season? If it is mere negligence, who is responsible for?

The 920-MW Plant That Went Silent

Perhaps the biggest symbol of the crisis is the Guru Hargobind Thermal Plant at Lehra Mohabbat. The entire 920-MW plant, one of Punjab's largest state-owned generating stations went offline recently after all four units shut down, one was allegedly restored later. Reports linked the shutdown to severe fly-ash accumulation and technical failures, while an ongoing strike further delayed restoration work.

Power plants do not deteriorate overnight. Such failures usually reflect years of inadequate maintenance, delayed upgrades and weak asset management. Punjab's thermal plants have been ageing for years, but successive governments failed to modernise it at the required pace.

Two units at Ropar had already crossed 30 years of operation before being retired, while several other units have either crossed or are approaching the 25-year benchmark that the Central Electricity Authority considers the normal economic life of subcritical thermal plants. Instead of investing in renovation, life-extension and new-generation supercritical capacity, governments across party lines allowed maintenance backlogs and infrastructure stress to accumulate, leaving the current administration to manage an increasingly fragile system, yet also making it accountable for preventing operational failures today.

Those who have been observing the development of power infra in the state say, while the present government is responsible for ensuring operational readiness, the ageing condition of Punjab's thermal infrastructure is also a legacy issue inherited from previous administrations.

Workers Protest, System Slows

The crisis extends beyond machinery. Nearly 1,852 outsourced PSPCL employees have staged strikes in phases over the issue of regularisation, disrupting operations at Lehra Mohabbat. Reports suggest skeleton staff have been managing essential operations under extreme pressure as negotiations remain unresolved.
Critical infrastructure depends as much on skilled manpower as on equipment. When labour disputes and technical failures occur simultaneously, operational risks increase dramatically.

Power Impacts Punjab's Green-fields

The timing could not have been worse. Punjab's paddy transplantation season depends heavily on uninterrupted electricity for irrigation.

Yet, with thermal generation declining, PSPCL has increasingly relied on external purchases while several districts have experienced power regulation and outages. Farmers have expressed concern over irregular supply during one of the most crucial agricultural windows.
For an agrarian economy, unreliable electricity is not merely an inconvenience. It directly affects crop productivity, groundwater pumping and rural incomes.

Can Industry Afford Uncertainty?

Reliable electricity is one of the first indicators investors examine before expanding manufacturing.
Punjab once enjoyed a reputation as one of India's leading industrial states. Today, frequent dependence on expensive market purchases, repeated thermal outages and operational uncertainty raise questions about the state's competitiveness.

Every hour of unreliable electricity increases production costs, particularly for MSMEs that already operate on thin margins. For a well-deserving state and which is competing with Haryana, Gujarat and Uttar Pradesh for investment, dependable power is no longer optional - it is a prerequisite.

The Financial Stress Question

The crisis also exposes concerns over the financial health of PSPCL. Reports indicate the utility has explored monetising valuable land assets while simultaneously purchasing high-cost electricity to maintain supply. Critics argue this reflects growing fiscal stress, though the utility maintains these are management decisions aimed at sustaining operations.

If operational expenses are increasingly being met through asset sales instead of structural reforms, questions about long-term sustainability become inevitable.

Punjab vs Haryana: Two Different Trajectories?

The comparison with neighbouring Haryana is becoming increasingly difficult to ignore.
Both states share similar geography, climate and agricultural dependence. Yet Haryana has consistently expanded transmission infrastructure, attracted manufacturing investment across Gurugram, Manesar, Panipat and Faridabad, and maintained a stronger industrial ecosystem supported by comparatively stable power availability. Haryana has also recorded significantly higher per-capita income than Punjab in recent official economic surveys, reflecting stronger overall economic momentum. Reliable electricity has been one of the factors supporting this growth.

While Punjab spends valuable administrative energy managing power shortages during peak demand, Haryana has increasingly focused on supporting industrial expansion and logistics-led growth.

The contrast raises an uncomfortable question: If two neighbouring states started with comparable strengths, why has one become an investment destination while the other is battling recurring infrastructure stress? Remember power is the real power that pushes economic growth. The story resonates in PIB data shows Punjab's per-capita NSDP at current prices at ₹1,73,873 in 2022-23 versus Haryana's ₹2,96,685.

Beyond and Besides the Obvious

While the government in power now in Punjab couldn't hide of the accountability, Punjab's energy sector has accumulated structural problems over many years.
Congress governments struggled to modernise ageing thermal infrastructure and improve the financial health of PSPCL.

AAP came to power promising governance reforms, uninterrupted electricity and administrative efficiency. Four years later, the current crisis has intensified public scrutiny over whether those promises have translated into durable improvements.
For voters, the issue is becoming less about political slogans and more about governance outcomes.

The Bigger Election Question

As the election bell to be rung soon, the power battle all set to take centre stage. Electricity powers much more than homes. It powers farms, factories, hospitals, schools, startups and investor confidence.

When power plants fail together, workers protest, utilities face financial strain and farmers struggle during the sowing season, citizens naturally begin asking whether Punjab's governance model requires a fundamental reset.
The question before Punjab is therefore much larger than a summer's power shortages.

Can a state that once powered India's agricultural revolution reclaims its economic leadership, or will recurring governance failures continue to leave both its industries and its young generation searching for opportunities elsewhere?