Mumbai: The central government’s Rs 1.6 trillion Atmanirbhar package for state power distribution companies (DISCOMs) have failed to have its desired effects due to tough conditions, slow disbursals and easier access to bank loans.
Discom overdues to power generation companies have risen substantially. The Government’s portal showed that much of the scheme’s funds remain unused.
Power generators give discoms 45-60 days to pay for the electricity supplied to them. Delays beyond this are classified as overdues, attracting a penal interest.
While loans to the discoms have been sanctioned to the extent of Rs 1.25 trillion, disbursals are low. While disbursals did slow down the growth of overdues, aggregate amounts remain high. Disbursements under the Atmanirbhar package has been quite slow.
Some state governments have either not been willing to adhere to the strict conditions of these loans set by PFC (power Finance Corporation) Ltd and REC Ltd as they have been able to raise funds from banks at similar rates with less stricter conditions. So generators particularly those selling renewable energy, have not seen payments rise the way they expected.
Hopefully when the partial lockdowns imposed by various states are eased there is a possibility that discom sales will pick up and payments will come in more regularly. Currently the state owned generation companies and renewable power supply companies are bearing the brunt of unpaid dues.
Author: Dr. Inderjit Mazumdar