Discoms' dues down by 3rd soon after enforcing Late Payment Surcharge Rule

The total outstanding dues of discoms has reduced by a third to around Rs 93,000 crore in May, in less than year of implementing the Late Payment Surcharge (LPS) Rules in June 2022.

Press Trust of India New Delhi
Photo: Bloomberg

Photo: Bloomberg

Listen to This Article

The total outstanding dues of electricity distribution utilities (discoms) has reduced by a third to around Rs 93,000 crore in May, in less than year of implementing the Late Payment Surcharge (LPS) Rules in June 2022.

The burgeoning dues of discoms toward power generation (gencos) mainly and transmission (trancos) firms have been affecting the entire value chain of the sector till last year.

According to industry data, in June last year, discoms' dues were at Rs 1.39 lakh crore at the time of the launch of the Late Payment Surcharge (LPS) scheme.

The total outstanding dues now stand at around Rs 93,000 crore as per the portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).

The PRAAPTI portal was launched in May 2018, to bring transparency in power purchase transactions between generators and discoms.

Experts believe the strict implementation of the Late Payment Surcharge (LPS) Rules can make the power sector more viable.

Also Read

Karnataka, Gujarat make most progress in clean energy transition: Report

Employees of 3 state-owned power firms go on strike; Maha invokes MESMA

Discoms' outstanding dues to gencos nearly halved to Rs 62,681 cr in Jan

Kerala Police spars with state electricity board over non-payment of dues

Pak textile sector suffers massive financial loss due to power outage

FMCG makers expect sustained recovery with price reduction in FY24

Govt planning to introduce amendment bill for minerals mined offshore

FPIs bring in Rs 30,945 cr in May on strong economic fundamentals

Investors, startups welcome proposed angel tax norms amid funding winter

New formal job creation at 22-month low in March, shows EPFO data

The Rule ensures that the outstanding discom dues are paid well in time. Besides, it has also ensured the payment of current dues in time. The scheme has played a key role to bring financial discipline among discoms.

The non-payment of current dues by discoms, one month after the due date of payment or two and half months after the presentation of power bill, whichever is later, shall attract regulation (power supply cut) of power under the the Late Payment Surcharge Rules, 2022.

Apart from this the power ministry had also provided for strong payment security management and made it mandatory for discoms to open credit letters or make payment of power supply well in time to ensure financial discipline.

During the first wave of the pandemic, in May 2020, the government announced a Rs 90,000 crore liquidity infusion for discoms under which government-owned Power Finance Corporation (PFC) and REC Ltd were to give loans at economical rates in order to enable gencos afloat from the impact of the outbreak.

Later, the infusion package was raised to Rs 1.2 lakh crore and further to Rs 1.35 lakh crore.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: May 21 2023 | 1:42 PM IST

Explore News