NEW DELHI: The Centre’s liquidity assistance package to power distribution companies has worked to mitigate the accumulation of debt over the past three quarters, but it has not led to a reduction. According to the Ministry of Power’s PRAAPTI portal, India’s discoms saw their dues to power generators rise to Rs 1.30 lakh crore by the end of November 2020, a massive 37.38 per cent higher than November 2019’s Rs 95,127 crore and 2.16 per cent higher than October 2020’s Rs 1,27,951 crore.
Under the Centre’s assistance programme announced in May, discoms were to be granted loans from state-run financiers PFC and REC worth Rs 1.2 lakh crore. As of the end of September 2020, the two had sanctioned loans worth Rs 1.18 lakh crore, of which Rs 31,100 crore had already been disbursed to 11 states. This assistance has been paralleled by a sharp rise in discoms’ monthly payments to gencos.
In the April-May 2020 period, discoms paid an average of just Rs 6,394 crore per month to gencos, less than half the Rs 13,550 a month paid the previous quarter and Rs 12,884 crore a month paid between October-December 2019. Assisted by the loans, however, this number rose to Rs 13,327 crore a month in the June-September quarter, and Rs 11,834 crore in October 2020.
However, this metric saw a dip again in November 2020 at Rs 9,814 crore. Analysts note that the rising dues are a sign of inherent stress in the power supply chain, which has only been made worse by the pandemic as state subsidy payments are delayed by state governments and losses due to unpaid consumer bills remain higher. According to ratings agency ICRA, the credit outlook for state discoms remains negative going forward due to their continued financial weakness.