Discoms turn more dependent on sops

The dependence of the mostly state owned electricity distributing companies (discoms) on subsidies has increased by seven to eight per cent in the current financial year over the previous year. According to the Union power ministry, the overall subsidy dependence of discoms for the current financial year is estimated at `81,000 crore.

The increase in the subsidy requirement is due to concessional tariff and subsidised power tariff in many states.

According to the Investment Information and Credit Rating Agency (ICRA) report, the dependence on subsidies by discoms in Telangana state, AP, Tamil Nadu, Karnataka, Gujarat, Bihar and Haryana, continues to be significant, ranging between 11 and 29 per cent of the overall revenue requirement.

TS Transco depends on the government's subsidy for supplying power for agriculture and the domestic sector. Transco has estimated that the revenue gap will be about `8,000 crore in the current financial year. The state government has allocated `3,500 crore in the budget towards subsidy to Transco.

Transco wanted to get additional revenue by increasing the tariff for various sectors, but the state government would not agree to a hike and so Transco has to depend on the subsidy to fill the revenue gap. The Transco had drawn up its estimates before the state government decided to give 24x7 power supply to the agriculture sector.

Transco supplies 24x7 power to the agriculture sector in three districts. According to its officials, the additional burden will be about `200 crore per month for these three districts.

The state government wants to extend the 24x7 power supply for the agriculture sector to all districts from next year. This will increase the financial burden on Transco. Transco is collecting additional surcharge from open access power consumers.