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Implementation of Electricity Rules Leads to Reduction in DISCOMs' Outstanding Dues: RK Singh

The minister stated that before the implementation of the rules, the total outstanding dues of states stood at INR 1,39,947 crores as of June 3, 2022.

February 12, 2024. By Abha Rustagi

The Union Minister for Power and New & Renewable Energy R.K. Singh has highlighted the positive impact of the implementation of the Electricity (LPS and Related Matters) Rules, 2022, on the financial health of distribution companies (DISCOMs). The rules have played a crucial role in reducing outstanding dues owed by DISCOMs to Generation Companies (GENCOs), thereby alleviating financial distress in the power sector.

The minister stated that before the implementation of the rules, the total outstanding dues of states stood at INR 1,39,947 crores as of June 3, 2022. However, as of January 31, 2024, after timely payment of eighteen monthly installments, the outstanding dues have significantly decreased to INR 49,452 crores. This remarkable reduction demonstrates the effectiveness of the rules in promoting timely payment and financial discipline among DISCOMs.

Furthermore, the minister emphasized that the rules have not only addressed outstanding dues but have also ensured that current dues are paid on time. This has contributed to enhancing the financial discipline of DISCOMs, which is essential for attracting investment in the sector and ensuring uninterrupted electricity supply to consumers.

The Government of India has been implementing various performance-linked and result-oriented schemes aimed at achieving a financially secure, viable, and sustainable power sector, particularly in the distribution segment. These initiatives include ensuring timely payment for subsidies declared by state governments, updating tariffs, conducting energy accounting and audits, and timely payment to GENCOs.

Moreover, the government has introduced revised prudential norms to discourage loss-making DISCOMs from accessing loans unless they develop a plan for loss reduction and adhere to it. Additionally, under schemes such as DDUGJY, IPDS, and SAUBHAGYA, significant infrastructure works have been executed to improve the quality and reliability of power supply to consumers.

The Revamped Distribution Sector Scheme (RDSS) aims to further enhance the quality and reliability of power supply through a financially sustainable and operationally efficient distribution sector. With an outlay of INR 3,03,758 crores and substantial government support, the scheme focuses on infrastructure development and smart metering to improve DISCOMs' financial viability and benefit end consumers.

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Minister of Power and New and Renewable Energy