State adjusts MSEB arrears against subsidy payment

Our Corporate Bureau

Mumbai, Oct 31: The Maharashtra government, which is reeling under acute financial crunch, in a bid to honour the Maharashtra Electricity Regulatory Commission’s (MERC) order, has adjusted the Maharashtra State Electricity Board’s (MSEB) arrears of Rs 600 crore against the payment of subsidy of equivalent amount for 2000-01. The state government, however, has released the balance subsidy amount of Rs 145.82 crore to MSEB through budgetary allocation.
According to the MERC, the government had to release a total subsidy of Rs 745.82 crore to the MSEB by October 31, 2001 following its (read state government) decision to revise tariffs payable by the agricultural and powerloom consumers. The government, during the last winter session of state legislature held in December, had reduced the tariff of agricultural consumers and powerloom consumers.
The MERC had taken a serious objection for such an unilateral announcement by the state government, especially when it had finalised the MSEB’s tariffs for 2000-01. However, MERC had asked the state government to compensate these sops through budgetary allocations to the MSEB for the possible loss of revenue.
State government sources told The Financial Express on Thursday that it has already fulfilled its assurance given to the MERC with regard to subsidy payment to MSEB. "However, the government has disputed the claim of Rs 900 crore made by MSEB for the liquidity loss which it incurred in view of delayed application of revised tariff rates. Similarly, the government has yet to take a decision on the release of subsidy of Rs 1,033 crore for 2001-02 to MSEB," sources added.