Discom overdue increases 5.5-times in 5 states; disputes rising too

Power distribution companies (discoms) in 26 of India’s 36 states and union territories (UT) have witnessed an increase in overdue since last year; with 30 territories having dues pending for more than two months.

The power ministry, in a written reply to Rajya Sabha, said on Tuesday that over a third of the Rs 1,35,497 crore of the loans sanctioned by Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) has been released.

The government had announced a liquidity infusion scheme last year under its Atmanirbhar Bharat Abhiyan initiative to help discoms clear their dues. However, data shows that the discom overdue has increased by 24 per cent since 2020. Discoms owe Rs 1,23,341 crore to central public sector enterprises (CPSE), state generators, independent power purchasers and renewable energy generators till January 2021, compared to Rs 99,489 crore last year.

Dues jumped by 24 per cent despite the pandemic, whereas the increase for the corresponding period last year was 61 per cent. Monthly data indicates that in the last one year it was only in three months that the payment by discoms (including the amount paid against outstanding) exceeded the amount billed to discom in that month.

Not just dues, even the disputed amount has been rising. Bills worth Rs 12,856 crore were in dispute till January 2020, the amount has risen to Rs 15,098 crore.

A state-wise analysis shows that in January discoms in states and UTs witnessed an increase in their overdue amount since last year, and nearly all, barring four, registered an increase in time taken to clear dues.

 

Five states witnessed an average 5.5-times increase in their dues. Overdue in West Bengal rose nearly 8-times from Rs 30 crore last year to Rs 262 crore. In Kerala, overdue rose from Rs 53 crore to Rs 398 crore and in Punjab, dues jumped from Rs 331 crore to Rs 793 crore.

Maharashtra discoms witnessed a 36 per cent decline in overdue from last year; however, the average time taken to clear the dues almost doubled. The average duration for overdue was 350 days as compared to 183 days last year.

Discoms in 26 states and UTs had almost two-thirds of their dues pending for over 60 days.

 

The government has announced another UDAY styled scheme in this year’s budget to get discoms on the path to recovery. “A revamped reforms-based result-linked power distribution sector scheme will be launched with an outlay of Rs 3,05,984 crores over 5 years,” the FM had said in her Budget speech in February.

But it remains to be seen how effective this would be, given UDAY failed in getting state electricity boards to meet the targets. UDAY had envisaged Aggregate Technical and Commercial Losses (AT&C) to reach 15% by FY19, but data from the UDAY website indicates that AT&C losses in the country were 24.31%.