The Delhi government on Tuesday cut power tariff by half, benefiting an estimated 28 lakh households.

The decision to subsidise power tariff, which will involve a cash outgo of Rs 61 crores in the next three months, was announced by Chief Minister Arvind Kejriwal after a meeting of the cabinet.

Kejriwal said the new rates would be applicable to those consuming up to 400 units of power a month.

"They will get 50 percent subsidy," he said, adding that this would benefit some 28 of the 34 lakh households in Delhi.

The cut in the electricity tariff came a day after Kejriwal announced supply of 20 kilolitres of water free of cost, another key election promise made by AAP.