Discoms narrowed losses to ₹17,352 cr in FY18, says govt
NEWDELHI:State-owned electricity distribution companies (discoms) have witnessed a substantial drop in their losses, power minister Raj Kumar Singh said on Tuesday. Discoms losses have narrowed to ₹17,352 crore in 2017-18 from ₹51,096 crore in FY16.
Before the introduction of the Ujwal Discom Assurance Yojana (UDAY) scheme, there were 211 divisions with losses of more than 40%, Singh said while highlighting the achievements of the four years of the National Democratic Alliance government. This number came down to 194 in 2016-17 and 134 in the first nine months of the current financial year.
The centre also said ₹20,000 crore in interest costs was saved by discoms under UDAY, and the success of the scheme will be crucial for the long-term fortunes of the electricity sector, given that distribution firms are the weakest link in the electricity value chain. Poor payment record of discoms have adversely affected power generation companies and caused stress in the banking. Singh said growing demand for electricity is an indicator of India’s economic growth and with the 10% rise in billed energy, the gap between the average cost of supply and average revenue realised is also narrowing.
India’s economy accelerated to 7.7% in the three months ended March 31, the fastest in seven quarters, signalling a turnaround that could augur well for the election prospects of the Narendra Modi government.
The NDA government added 100 gigawatts (GW) of generation, with the energy deficit being reduced from 4.2% in 2013-14 to 0.7% in 2017-18. Singh also said that the KUSUM scheme, which promotes the use of solar power among farmers, will be implemented from July.
All the proposed reforms, such as penalty on gratuitous loadshedding, not allowing losses of more than 15% as a pass through in tariff and limiting cross-subsidies, have in included in the draft national tariff policy, which will come into force from the next financial year, Singh added.
While analysts welcomed the moves, they were apprehensive about its implementation. “These amendments propose significant reforms in the electricity distribution business,” rating agency Icra Ltd said.