Corona worsened the discipline of electricity consumers to pay their electricity bills

Mumbai, Ta. Wednesday, October 21, 2020

Corona has eroded the discipline of electricity consumers to pay their electricity bills, which has again posed a new threat to the financial status of electricity distribution companies (DISCOMs) in many states of the country.

In the first five months of the current financial year, the amount owed by five discoms in Uttar Pradesh to power generating companies has increased by Rs 15,000 crore.

In view of the burden caused by the corona, the Union Power Ministry has announced a liquidity package of Rs 1.50 lakh crore to the country's discoms.

Despite various measures taken by the government for the discoms to cope with the situation in Corona's time, the debt burden of the discoms is increasing which indicates that the measures taken by the government are inadequate.

The government has introduced a letter of credit mechanism in August last year to ensure that Discom pays electricity bills to power generating companies on time.

At the end of August, the amount owed by each of the country's discoms to power plants rose by 9 per cent to Rs 1.50 lakh crore. In FY17, the combined loss of DISCOMS was Rs 5,150 crore. Corona is likely to see an increase in these losses, which will further worsen the financial position of Discoms, an analyst said.