CAG Flags Discrepancies and Billing Errors in Karnataka's Gruha Jyothi Scheme

A pilot audit conducted by the Comptroller and Auditor General (CAG) has revealed multiple discrepancies in the implementation and auditing of Karnataka’s Gruha Jyothi free electricity scheme. The audit flagged issues such as the extension of subsidies to apparently ineligible consumers, unusually long billing cycles, differences in electricity consumption calculations, and inconsistencies between database records and physical bills.

The Gruha Jyothi scheme provides eligible domestic consumers in Karnataka with free electricity up to a monthly consumption limit of 200 units. According to Karnataka’s Economic Survey 2025-26, the scheme registered approximately 1.66 crore beneficiaries as of December 2025, with the state releasing ₹22,040 crore in subsidies between July 2023 and December 2025.

Ineligible Beneficiaries and Extended Billing Cycles

The CAG’s pilot audit revealed that some consumers whose electricity connections had shifted from domestic to commercial tariffs continued to receive the Gruha Jyothi subsidy. The audit identified this as an issue requiring a detailed examination of beneficiary eligibility.

Additionally, the audit examined whether monthly billing adhered to operational guidelines, which prescribe meter reading and billing every 30 days to determine subsidy eligibility based on actual consumption. However, the audit found billing cycles extending from 45 days to as long as 518 days in certain cases.

The CAG noted that these extended billing cycles make it difficult to verify whether a consumer’s monthly consumption remained within the 200-unit eligibility ceiling. In some instances where monthly meter readings were unavailable, subsidy calculations were based on estimated or presumed consumption rather than actual usage, potentially leading to subsidies being credited without proper verification.

Discrepancies in Consumption and Billing Data

The audit also highlighted variations in the calculation of total electricity consumption, which is normally determined by subtracting the previous meter reading from the current reading. The CAG reportedly found differences of up to 824 units in the consumption records examined. Furthermore, discrepancies of up to 10 units were observed in entitlement calculations when compared with the criteria set by government orders.

Inconsistencies were also found between the billing data submitted for audit and the physical bills issued to consumers. These differences related to components such as arrears, current demand, interest on revenue, and interest on tax.

According to the CAG, these mismatches suggest that changes may have been made outside the centralised system or were not captured in the audit trail. While the observation does not establish deliberate alterations, it highlights the need for stronger controls and robust audit trails to prevent manual corrections or systemic errors in the primary database.

Timeline Deviations and Regional Red Flags

The CAG audit also pointed out a discrepancy regarding the timeline of the scheme's implementation. The audit found that the Gruha Jyothi benefit had been extended for electricity consumption in June 2023, despite official government orders specifying that the subsidy should commence with July 2023 consumption.

In a specific exception report concerning the Harapanahalli subdivision of the Davangere division, the audit flagged records of 14,773 beneficiaries covering 83,417 bills, indicating that these cases require further detailed examination.

Database Access Restrictions and IT Limitations

The pilot audit faced challenges due to restricted access to the databases of the electricity supply companies (ESCOMs) and the Energy Department. Although the CAG made repeated requests starting in January 2026 for access to master database tables, access to 19 master database tables was only provided on June 6, 2026.

Even after access was granted, the audit team faced restrictions on CPU usage and the number of queries they could run, which hindered their ability to execute complex SQL queries necessary for a detailed data analysis.

The CAG attributed these limitations to restrictions within the IT system arrangements. It suggested that the Bangalore Electricity Supply Company (BESCOM) should review its agreement with its IT system provider to ensure adequate storage and computing capacity are available for analytical and audit requirements. The CAG emphasised that audit access should not be constrained by system limitations when examining large-scale public expenditure and beneficiary databases.