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Discom revival: Five states agree to liquidate ₹90,000 crore of dues – EQ Mag Pro

Discom revival: Five states agree to liquidate ₹90,000 crore of dues – EQ Mag Pro

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Five key states that account for the majority of power dues have agreed to liquidate about ₹90,000 crore in excellent funds and subsidy liabilities of their cash-strapped electrical energy distribution firms which might be on the breaking point.

They will even assume almost ₹45,000 crore losses of those distribution utilities below a central scheme to deal with energy sector stress, sources advised ET.

These states – Uttar Pradesh, Rajasthan, Andhra Pradesh, Telangana and Tamil Nadu – represent almost 65% of the overdue funds to energy initiatives, accounting for the majority of the stress within the sector.

Discussions for an identical revival roadmap are additionally going on with many different states which have agreed to participate within the Centre’s result-oriented revamped distribution sector scheme (RDSS).

“If fully implemented by states, it is very positive for the sector. This will help ease the stress in the sector to a large extent,” mentioned Ashok Khurana, director basic of Association of Power Producers. “We hope that after liquidation of previous dues, these states will guarantee common fee of subsidy, state departmental dues and power bills.”

These 5 states have submitted their cabinet-approved revival measures that embrace tariff revisions amongst others. This can be the primary tariff revision in almost six years in a few of these states.

Soaring Electricity Demand

The measures would guarantee funds to distribution firms amid hovering electrical energy demand that has compelled states like Maharashtra and Andhra Pradesh to subject official orders on load shedding and energy holidays.

“Most states have agreed to take over financial losses of their distribution companies either partially or fully under the RDSS or the scheme for availing additional borrowing space of 0.50% of GSDP in the coming years,” mentioned a senior authorities official. “All states plan to liquidate 100% of the government department dues by FY25.”

Most of the state-owned distribution firms are cash-starved and plenty of banks usually are not able to lend to them given their dire monetary situation.

The checks below the RDSS scheme would push the ability distribution firms (discoms) to make sure adherence to agreed timelines and liquidation technique.

“In case they are unable to comply and meet the set-out milestones, they would not be eligible for availing any additional borrowing space starting from FY23,” the official mentioned. Tamil Nadu has dedicated 100% discom losses takeover from FY22 until FY25 and as per the agreed roadmap with the Centre, the state is anticipated to file for tariff revisions for the primary time in six years.

It additionally plans to encash excellent energy payments of Rs 2,702 crore from numerous authorities departments. The distribution utilities of Uttar Pradesh have dedicated to liquidating 40% of Rs 20,940 crore excellent subsidy dues by FY25 and paying authorities division electrical energy payments of Rs 10,347 crore.

Rajasthan distribution utilities have excellent subsidy dues of Rs 17,459 crore and excellent authorities division payments of Rs 1,832 crore.

The state targets to liquidate 80% of subsidy dues by FY25 and 100% by FY26. Electricity distribution firms of Andhra Pradesh plan to liquidate 100% of Rs 13,880 crore payable subsidy dues and Rs 8,307 crore dues by FY25.

Telangana energy distribution firms have Rs 14,442 crore receivables from numerous state authorities departments.

While Telangana has no plan for a discom loss takeover, Andhra Pradesh, Uttar Pradesh, and Rajasthan have agreed to take over 60% of FY22 losses in FY23. Similarly, 75% of losses for FY23 will likely be taken over in FY24 and 90% of FY24 in FY25, in keeping with the plan submitted.

Source: PTI
Anand Gupta Editor - EQ Int'l Media Network