NEW DELHI: Outstanding dues of discoms (electricity distribution companies) have come down by more than 32% since May 2022 in nearly a year since the power ministry introduced the late payment surcharge (LPS) rule to check with a view to instilling payment discipline in state utilities.
Ministry data pegs the discoms’ total outstanding dues to gencos (generation) and transcos (transmission) companies at Rs 92,759.7 crore as of May 21 against Rs 1.38 lakh crore as of June 3, 2022 when the rule was notified.
The sharp decline in the total outstanding indicates timely payment by discoms to gencos and transcos, a major problem that clouded the viability of the power sector with possible repercussion on the banking sector.
The rising payment discipline is borne out by data, which indicates Rs 26,468 crore, or 28% of the total outstanding, as overdue and Rs 66,243 crore, or 71%, as current dues. In contrast, gencos’ outstanding remained above Rs 1 lakh crore before LPS rule was implemented.
Under the LPS rule, discoms’ will lose access to power through spot or term contracts if they fail to clear current dues within a month after the due date or two-and-a-half months after the presentation of the bill by gencos or transcos, whichever is later.
Simultaneously with the LPS rule, the ministry had also offered an instalment scheme to discoms for clearing past dues with loans from sectoral lender PFC with a view to updating the cycle to current billing.
Ministry data pegs the discoms’ total outstanding dues to gencos (generation) and transcos (transmission) companies at Rs 92,759.7 crore as of May 21 against Rs 1.38 lakh crore as of June 3, 2022 when the rule was notified.
The sharp decline in the total outstanding indicates timely payment by discoms to gencos and transcos, a major problem that clouded the viability of the power sector with possible repercussion on the banking sector.
The rising payment discipline is borne out by data, which indicates Rs 26,468 crore, or 28% of the total outstanding, as overdue and Rs 66,243 crore, or 71%, as current dues. In contrast, gencos’ outstanding remained above Rs 1 lakh crore before LPS rule was implemented.
Under the LPS rule, discoms’ will lose access to power through spot or term contracts if they fail to clear current dues within a month after the due date or two-and-a-half months after the presentation of the bill by gencos or transcos, whichever is later.
Simultaneously with the LPS rule, the ministry had also offered an instalment scheme to discoms for clearing past dues with loans from sectoral lender PFC with a view to updating the cycle to current billing.