NEW DELHI: The amount of money India’s power distribution companies (discoms) owe power generators (gencos) reversed direction for the first time in several months in December 2020, falling from Rs 1,27,128 crore at the start of the month to Rs 1,27,108 crore as of December 31, 2020.
The fall in the amount of dues is a promising sign that the Centre’s liquidity assistance scheme may finally be working to not just slow the accumulation of dues, but shrink the existing debt pile. According to power sector executives, improving demand and bill payments are also helping in arresting the trend.
According to data released on the Union Ministry of Power’s PRAAPTI web portal, discom dues have been on a steady rise upwards since the beginning of the pandemic—going from Rs 99,017 crore at the end of March 2020 to a whopping Rs 1,23,207 crore by the end of June.
This rapid accumulation of debt forced the Centre to bail out discoms through a debt-based liquidity assistance scheme in May, one that sources say has so far seen nearly Rs 1.3 lakh crore of loans sanctioned and over Rs 40,000 crore of which have already been disbursed.
Once money began flowing through the scheme, the rapid piling up of debt slowed down considerably as discoms began to pay more of their pending dues to gencos, with total dues rising to just Rs 1,27,128 crore by November.
For instance, 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, Rs 11,834 crore in October 2020, and Rs 12,437 crore in November 2020. This figure hit Rs 14,596 crore during the month of December.