State depts owe ~97K cr to discoms
As s state-owned power distribution companies (discoms) gear up for the new ~3-trillion reforms scheme, a major problem in their own backyard can prevent them from being eligible. Several state government departments owe a massive ~97,000 crore to discoms in terms of unpaid or delayed electricity bills.
There is also an additional ~60,743 crore electricity subsidy that is yet to be paid to the discoms from the state governments, data compiled by the Union ministry of power revealed. Several state governments give subsidies on electricity to a section of the population. This amount is later paid back to the discoms.
The highest government dues are in Haryana where discoms are to get ~46,193 crore. Rajasthan is where the unpaid subsidy amount is the highest at ~18,313 crore.
Among several eligibility criteria for the new discoms reform scheme, state governments are supposed to clear their dues to discoms. The prequalifying criteria mandates that states clear dues, subsidy amounts and install prepaid meters in all government offices in the state. The state electricity regulatory commissions have to also ensure the installation of prepaid meters. Regulators will have to ensure that there is regular electricity tariff revision. Discoms, on the other hand, are required to publish their quarterly and annual accounts. They are also mandated to clear their dues to power generating and transmission companies.
Only those discoms and states that meet the pre-qualifying criteria would be eligible and funds released for the infrastructure works under it would be done accordingly.
The scheme also has a result evaluation matrix under which only a minimum score of 60 would ensure future fund release by the Centre. The central grant under the scheme is only 60 per cent of the total fund corpus.
A senior government official said state governments can borrow from sector lenders like Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). However, their lending will also follow the same criteria as under the reforms scheme. “PFC and REC will not extend any loan to lossmaking discoms, for those who have no trajectory to reduce their operational and financial losses,” said the official. PFC and REC have also been nominated as nodal agencies for facilitating implementation of the scheme. The new ‘Reforms-based and Results-linked, Revamped Distribution Sector Scheme’ seeks to improve operational efficiencies and financial sustainability of all discoms/ power departments (excluding private sector discoms).