State owned discoms of Maharashtra and Tamil Nadu have most outstanding dues towards generation companies, according to information tabled in Parliament.
According to a recent reply given by Union power minister R.K. Singh in the Rajya Sabha, the total outstanding dues by discoms to power generators was Rs.95,167 crore, as of December 31, 2021.
Rajasthan, Uttar Pradesh, Andhra Pradesh and the UT of Jammu & Kashmir were other cases with significant outstanding to power generators.
The top ten states/UTs in terms of discom outstanding accounted for 92 per cent of the country’s total. (See table)
On the other hand, states like Gujarat, Odisha and West Bengal were at the other end of the spectrum with insignificant payables to power producers.
Of the all-India discoms outstanding of Rs.95,167 crore, a whopping 56 per cent was payable to private power producers (IPPs). Another 24 per cent was due to Central power generation companies (NTPC, NHPC, etc), while the remaining 20 per cent was payable to renewable energy generators. As much of India’s renewable energy capacity lies with the private sector, it can be seen that private sector, as an ownership group, is most affected by delayed payment by state government discoms.
Returning to worst-performing states Maharashtra and Tamil Nadu, it is interesting to see that nearly 89 per cent of Maharashtra’s dues were towards independent power producers. On the other hand, discoms in Tamil Nadu had only 48 per cent of their total dues payable to IPPs, another 36 per cent was payable to Central power generators.
Liquidity Scheme
It may be recalled that in May 2020, in order to help discoms to tide over their liquidity crisis that was worsened by the pandemic, the Centre announced a Liquidity Infusion Scheme as part of Aatmanirbhar Bharat Abhiyan. Under this intervention, Rural Electrification Corporation (REC) Ltd. and Power Finance Corporation (PFC) Ltd. are extending special long term transition loans up to 10 years to discoms for liquidating outstanding dues (as on June 30, 2020) of Central government generators and tarmission companies, IPPs and renewable energy generators.
So far, loans to the extent of Rs.1.35 lakh crore (trillion) have already been sanctioned while actual disbursement stood at Rs.1.03 lakh crore, as of December 31, 202. The assistance under this scheme is actually a long-term transition loan that is linked with discoms undertaking specified reform measures. (See related recent story)
