Discoms' outstanding dues to gencos fall 11.2% to ₹81,628 cr

The total outstanding dues owed by electricity distribution utilities or discoms to power producers fell 11.2 per cent to ₹81,628 crore in April 2021 from a year ago.

Discoms in Rajasthan, Uttar Pradesh, Jammu & Kashmir, Telangana, Andhra Pradesh, Karnataka, Maharashtra, Jharkhand, and Tamil Nadu account for the major portion of dues to gencos, as per official data. 

Discoms owed a total ₹91,915 crore to power generation firms in April 2020, according to portal PRAAPTI (Payment Ratification and Analysis in Power Procurement for Bringing Transparency in Invoicing of Generators). 

Also read: ₹90,000 crore liquidity infusion to help Discoms, says Sitharaman

However, outstanding dues of discoms towards electricity producers have been increasing year-on-year as well as month-on-month for years, indicating perennial stress in the power sector till February this year. It has started tapering off from March 2021.

Total dues in April increased sequentially compared to ₹78,841 crore in March this year.

Total outstanding dues of discoms had dipped 3.4 per cent in March this year from ₹81,687 crore in the same month last year.

The PRAAPTI portal was launched in May 2018 to bring in transparency in power purchase transactions between generators and discoms.

In April 2021, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at ₹68,732 crore as against ₹76,117 crore in the same month a year ago. The overdue amount stood at ₹67,656 crore in March this year.

Power producers give 45 days to discoms to pay bills for electricity supply. After that, outstanding dues become overdue and generators charge penal interest on that in most cases. To give relief to power generation companies (gencos), the Centre enforced a payment security mechanism from August 1, 2019.

Under this mechanism, discoms are required to open letters of credit for getting power supply. The Centre had also given some breathers to discoms for paying dues to gencos in view of the COVID-19-induced lockdown. The government had also waived penal charges for late payment of dues.

In May, the government announced ₹90,000 crore liquidity infusion for discoms under which these utilities would get loans at economical rates from Power Finance Corporation (PFC) and REC Ltd. This was a government initiative to help gencos remain afloat. Later, the liquidity infusion package was increased to ₹1.2 lakh crore and further to ₹ 1.35 lakh crore. Under the liquidity package, over ₹80,000 crore has been disbursed.

Overdue of independent power producers amounted to 53.04 per cent of the total overdue of ₹68,732 crore of discoms in April 2021. The proportion of central PSU gencos in the overdue was 30.52 per cent.

Among the central public sector gencos, NTPC alone has an overdue amount of ₹5,167.11 crore on discoms, followed by Damodar Valley Corporation at ₹5,156.34 crore; NLC India, ₹3,416.18 crore; NHPC, ₹2,261.05 crore; and THDC India, ₹1,134.17 crore in April 2021.

Among private generators, discoms owe the highest overdue of ₹18,608.11 crore to Adani Power followed by Bajaj Group-owned Lalitpur Power Generation Company at ₹4,817.12 crore and SEMB (Sembcorp) at ₹2,364.56 crore in the month under review.

The overdue of non-conventional energy producers like solar and wind stood at ₹11,296.24 crore in April 2021. 

Revival efforts

The COVID-19 lockdown has hit the already-in-red discoms hard as the main source of revenue for these power distribution companies are industries and commercial establishments. As the lockdown affected the functioning of the latter, the discoms were hit. The Centre, in a massive effort, announced the Ujwal Discom Assurance Yojana, also known as UDAY, to help the companies, in 2015. 

Notably, India is the third-largest electricity producer in the world and the compounded annual growth rate of generation has been 8.9 per cent. In actual terms, it grew from 124 to 344 GW between 2006 and 2018.

(With inputs from Agencies)