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Govt to permit Discoms to settle dues in 48 month-to-month instalments

The federal government is engaged on a scheme to liquidate the previous dues of Discoms, which, as on Might 18, stand at ₹1,00,018 crore. Below the scheme, the Discoms shall be allowed to pay dues in as much as 48 month-to-month instalments, the Energy Ministry stated on Wednesday.

The shortcoming of Discoms to pay dues impacts all the worth chain of the ability sector. The scheme will assist Discoms save ₹19,833 crore, it stated in an announcement.

“Delay of funds by a Discom to a producing firm (Genco) impacts the money move of a producing firm, which must make provisions for enter provides similar to coal, and for retaining enough working capital for day-to-day operation of the ability plant, and so forth.

Per knowledge out there on PRAAPTI portal, as on Might 18, 2022, the Discoms overdues (excluding disputed quantities and Late Fee Surcharge (LPSC)) stood at ₹1,00,018 crore and LPSC dues at ₹6,839 crore.

Discoms to achieve

The proposed scheme permits cost of monetary dues in simple installments by the Discoms. A one-time leisure is being thought-about whereby the quantity excellent (consists of principal and LPSC) on the date of notification of the scheme shall be frozen with out additional imposition of LPSC.

“The Discoms shall be given flexibility to pay the excellent quantity in as much as 48 instalments. The liquidation of excellent dues in deferred method with out imposition of LPSC will give Discoms time to shore up their funds. On the identical time, the Genco will profit from assured month-to-month funds which in any other case weren’t forthcoming to them.

Nevertheless, in case of delay in cost of an instalment by a Discom, the Late Fee Surcharge shall be payable on all the excellent dues which in any other case was exempted.

“On account of the proposed scheme, the Discoms will save an quantity of ₹19,833 crore on LPSC within the subsequent 12 to 48 months. States similar to Tamil Nadu and Maharashtra which have giant arrears will save over ₹4,500 crore every because of this measure. Uttar Pradesh will save round ₹2,500 crore, whereas States similar to Andhra Pradesh, Jammu and Kashmir, Rajasthan and Telangana will save within the vary of ₹1,100-1,700 crore,” the Energy Ministry famous.

The financial savings by Discoms will finally profit the electrical energy shopper by decreasing the burden of LPSC within the retail tariff. The measure is anticipated to supply well timed liquidation of arrears which may be very rather more vital to the Gencos than the quantity foregone on LPSC. On the identical time, appropriate measures are being put in place to make sure that Discoms pay their dues to Gencos frequently, in any other case provide by Gencos shall be diminished, it added.

Late Fee Surcharge

Late Fee Surcharge (LPSC) is levied on the cost excellent by a Discom to a producing firm on the base price (pegged to SBI’s Marginal Value of Lending Price (MCLR)).

LPSC is relevant for the interval of default at base price for the primary month of default and will increase by 0.5 per cent for each successive month of delay, topic to a most of three per cent over base price at any time.

Revealed on

Might 25, 2022

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