'Discoms' outstanding dues reduced by Rs 29,857 crore'

New Delhi: Power distribution utilities or discoms' total outstanding dues reduced by Rs 29,857 crore to Rs 1,08,092 crore, which were Rs 1,37,949 crore on June 3, 2022, Parliament was informed on Tuesday.

One of the key indicators of financial distress of discoms is mounting power purchase dues towards the generation companies (gencos).

With the implementation of Electricity (LPS and Related Matters) Rules, 2022, a remarkable improvement has been seen in recovery of outstanding dues, power minister R K Singh said in a written reply to Rajya Sabha on Tuesday.

The minister informed the House that the total outstanding dues of the states, which were at Rs 1,37,949 crore as on June 3, 2022, have been reduced by Rs 29,857 crore to Rs 1,08,092 crore, with timely payment of just five monthly instalments.

Distribution companies are also paying their current dues in time to avoid regulations under the rule and have paid almost Rs 1,68,000 crore of current dues in last five months, he stated.

Based on the results achieved so far, it is expected that strict implementation of the LPS (late payment surcharge) Rules will bring back financial viability of the power sector in the country and would attract investment to ensure reliable 24x7 electricity to the consumers.

This rule have not only ensured that the outstanding dues are liquidated but also ensured that the current dues are paid in time. It may be seen that the rule has played a vital role towards ensuring the financial discipline in discoms, the minister added.

In another written reply to the House, Singh stated that there is no proposal for privatisation of any existing state-owned distribution licensee and they shall continue to function as earlier.

About fears of impact of Electricity Amendment Bill 2022 on the poor, he explained that the provision of multiple licensees already exists in the present Electricity Act 2003 and no new concept has been introduced.