Chandigarh, Oct 18 (IANS): Providing a major relief to village residents, the Punjab Cabinet on Monday decided to provide free power to all rural water supply schemes from October 1.

A spokesperson for the Chief Minister's Office said here the decision would entail an annual expenditure of Rs 440 crore.

The Cabinet, chaired by Chief Minister Charanjit Singh Channi, also decided to waive off all outstanding arrears of water supply and sewerage charges for domestic connections. This decision is likely to cost the state exchequer nearly Rs 700 crore.

It gave nod to reduce the service charges on all rural water supply schemes by 70 per cent from Rs 166 to Rs 50 per household per month in the villages.

It was also decided to provide funds through budgetary support or grant to settle outstanding arrears of Rs 1,168 crore of power bills of rural water supply schemes.

Extending a major relief to the people residing in urban areas, the Cabinet also decided to reduce water usage charges to Rs 50 per month for domestic connections of all categories having plot size above 125 sq yards in municipal councils or nagar panchayats and municipal corporations.

Plots up to 125 sq yards in urban areas have already been exempted from paying water and sewerage user charges. Both these concessions would benefit nearly 25 lakh families living in urban areas.