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As state-owned power distribution companies (discoms) gear up for the new Rs 3 trillion reform scheme, a major problem in their own backyard can prevent them from being eligible for it. Several state government departments owe a massive Rs 97,000 crore to discoms in terms of unpaid or delayed electricity bills.
There is also an additional Rs 60,743 crore electricity subsidy that is yet to be paid to the discoms from the state government, data compiled by the union ministry of power revealed. Several state governments give subsidy on electricity to a section of population. This amount is later paid back to the discoms.
The highest government dues are in Haryana where discoms are owed Rs 46,193 crore. Rajasthan is where the unpaid subsidy amount is the highest at Rs 18,313 crore.
Among the several eligibility criteria for the new discoms reform scheme, the state government is supposed to clear their dues to the discoms. The pre-qualifying criteria mandates the state government to clear dues, subsidy amounts and install prepaid meters in all government offices in the state.
The state electricity regulatory commissions are also responsible to ensure the installation of prepaid meters. The regulators are also 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 who meet the pre qualifying criteria will be eligible for the skin and the fund release 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 central government. The central government grant under the scheme is only 60 per cent of the total fund corpus.
Senior government official said the state governments can borrow from sector lenders 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 loss making discoms for those who have no trajectory to reduce their operational and financial losses,” said the official. PFC and REC are also nominated as nodal agencies for facilitating implementation of the scheme.
The new ‘Reforms-based and Results-linked, Revamped Distribution Sector Scheme’ seeks to improve the operational efficiencies and financial sustainability of all discoms/power departments (excluding private sector discoms) by providing conditional financial assistance to discoms for strengthening of supply infrastructure.
The Scheme will have an outlay of Rs 3,03,758 crore with an estimated gross budgetary support from the Central Government of Rs 97,631 crore. All the existing power sector reforms schemes namely DDUGJY, IPDS, PM-KUSUM scheme would be subsumed into this umbrella program. Singh said till yet Rs 2 lakh crore has already been given to the states under these schemes.
State-owned discoms across the country and financially and operationally beleaguered despite four reform schemes in the last 15 years. The earlier discom reform scheme UDAY concluded in FY20 with most of the states failing to meet their stipulated targets and still in red.
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