In June 2020, electricity distribution companies’ (discom) dues against private, state and central government-run power transmission and generation companies stood at a whopping Rs 2.6 lakh crore. Under the Aatma Nirbhar Bharat mission, Finance Minister Nirmala Sitharaman had announced liquidity support of Rs 90,000 crore by PFC and REC to cash trapped discoms.
Under the liquidity scheme, PFC, REC sanctioned about Rs 68,000 crore and disbursed about Rs 24,000 crore so far. With relaxation in the state’s borrowing limits, it is expected that liquidity infusion may see an increase to Rs 1.2 lakh crore by the end of the year.
With the ongoing liquidity infusion, CNBC-TV18 has learnt that the government believes the losses of discoms will come down to about Rs 1.4 lakh crore, while losses in FY19 and FY20 remained at Rs 2.2 lakh crore. As per government data on PRAAPTI portal, at the end of July 2020, the maximum dues are from states like Rajasthan, Tamil Nadu and Uttar Pradesh among others. The overdue amount for Rajasthan stands at Rs 35,042 crore, Tamil Nadu at Rs 18,970 crore and Uttar Pradesh at Rs 13,715 crore.
“The fact that the level of outstanding is the same at the end of FY20 as FY19 gives us some hope, expect financial losses to come below the Rs 1.5 lakh crore mark this year. Reform linked distribution schemes will ensure discoms meet their targets and reform instead of accumulating losses,” said a source who did not wish to be quoted.
To plug further losses from discoms, after the implementation of the liquidity scheme, the power ministry has prepared a “reforms linked distribution scheme” for states. This scheme will provide funds for power sector reforms to states on the basis of reduction in financial and technical losses on electricity distribution. CNBC-TV18 has also learnt that an inter-ministerial consultation has been conducted and the scheme will come up for cabinet approval within two months.
The power ministry is on track to privatise discoms in union territories like Chandigarh, Andaman and Nicobar, Dadra Nagar Haveli, Daman and Diu by FY21.
