In a notable development, state distribution companies (DISCOMs) in India have reported a significant reduction in dues owed to power generators for the billing cycle in March 2024, according to data released by the Ministry of Power’s payment ratification and analysis portal PRAAPTI.
The total dues owed to power generators stood at ₹778.57 billion ($9.34 billion) for March 2024, marking a considerable decrease from the previous month’s figure of ₹920.88 billion ($11.12 billion) in February. Excluding the latest monthly dues, the current outstanding amount stands at ₹273.15 billion ($3.27 billion). Notably, overdue payments before the trigger date amount to ₹273.02 billion ($3.27 billion), with late payment surcharges applying thereafter. Among the states, Uttar Pradesh DISCOMs top the list with dues amounting to ₹97.7 billion ($1.17 billion), followed closely by Tamil Nadu at ₹89.62 billion ($1.07 billion), and Gujarat at ₹78.51 billion (~$942.28 million).
The trigger date for payment is one month after the due date or two and a half months after the presentation of the bill by the generating company, whichever is later. DISCOMs are permitted to pay the outstanding amount in up to 48 installments. Last December, the Ministry of Power proposed regulatory measures to address delayed payments, particularly for DISCOMs failing to clear dues beyond the stipulated period. These efforts aim to enhance financial discipline within the power sector. Furthermore, the ministry highlighted a positive trend in Aggregate Technical and Commercial (AT&C) losses, which decreased from 17% in FY 2021-22 to 15.41% in FY 2022-23. This improvement is attributed to initiatives under the Revamped Distribution Sector program, aimed at enhancing operational efficiencies and financial sustainability among DISCOMs. Lower AT&C losses contribute to narrowing the gap between Average Cost of Supply and Average Revenue Realised, ultimately ensuring better quality supply for end consumers. Overall, the decline in DISCOM dues coupled with regulatory interventions and operational enhancements bode well for the stability and resilience of India’s power sector.
