Discoms' debt to hit an all-time high of Rs 4.5 trillion by FY21: Crisil

Higher costs and constrained cash inflows amid declining demand mean the per-unit operating gap of discoms will widen to 83 paise per unit by the end of this fiscal

Power distribution utilities' debt will hit an all-time high of Rs 4.5 lakh crore by the end of the ongoing financial year, CRISIL Ratings said on Friday.

The liquidity package of Rs 90,000 crore announced by the government last month offers a breather, but structural reforms have become critical to sustainability of discoms, the rating agency said in a statement.

The package will help state power distribution companies (discoms) settle a significant portion of their overdue bills to generating companies, it said.

However, it noted that with power demand weak and cash losses high amid the COVID-19 pandemic, discoms would end up owing