The southern state is followed by Uttar Pradesh and Maharashtra, with their state discoms being sanctioned loans of Rs 20,940 crore and Rs 14,310 crore, respectively.
Power sector suffers from problems of plenty due to the surplus generating capacity
Tamil Nadu has topped the chart in terms of loans being sanctioned for state power distribution companies (discoms) under the Rs 1.2 lakh crore liquidity infusion scheme, with the state’s share of credit standing at Rs 30,230 crore. The southern state is followed by Uttar Pradesh and Maharashtra, with their state discoms being sanctioned loans of Rs 20,940 crore and Rs 14,310 crore, respectively.
Other major beneficiary states/Union Territories (UTs) in terms of sanctioned credit are Telangana (Rs 12,652 crore), Jammu and Kashmir (Rs 11,024 crore), Karnataka (Rs 7,247 crore) and Andhra Pradesh (Rs 6,600 crore). State-run non-banking finance firms Power Finance Corporation (PFC) and REC Ltd, which are implementing the scheme, have sanctioned loans worth Rs 1,18,273 crore so far under the liquidity infusion scheme for discoms.
In May, Finance Minister Nirmala Sitharaman had announced Rs 90,000 crore liquidity infusion into cash-strapped discoms facing demand slump due to the COVID-19 crisis. This package was later increased to Rs 1.2 lakh crore by the Ministry of Power.
“Loans worth Rs 1,18,273 crore has been sanctioned by the PFC and REC together under the liquidity infusion scheme for discoms. Tamil Nadu has been sanctioned loan worth Rs 30,230 crore under the package followed by Rs 20,940 crore for Uttar Pradesh and Rs 14,310 crore for Maharashtra,” a source told PTI. The loans were sanctioned under the scheme as per the demand as well as the eligibility of the states.
The source also said that as far as disbursal of loans is concerned, Uttar Pradesh has already received Rs 10,470 crore followed by Telangana (Rs 6,287 crore), Andhra Pradesh (Rs 3,300 crore), Jammu & Kashmir (Rs 3,290 crore), Maharashtra (Rs 2,500 crore) and Rajasthan (Rs 2,032 crore).
Under the scheme, a total of Rs 31,135 crore has been disbursed to states discoms so far to pay off their outstanding dues. According to PRAAPTI portal (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators), discoms’ total outstanding dues as of September stood at Rs 1.37 lakh crore. As per the portal, Tamil Nadu has an overdue amount of over Rs 21,838 crore as of September this year.
Power producers give 45 days to discoms for paying bills for the supply of electricity. After that, outstanding dues become overdue and generators charge penal interest on that in most cases. Similarly, the overdue outstanding amount of Uttar Pradesh is Rs 11,539 crore as of September and that of Maharashtra stands at Rs 7,469 crore.
Telangana and Jammu & Kashmir have been sanctioned loans worth Rs 12,652 crore and Rs 11,024 crore, respectively under the scheme. The overdue amount of Telangana and Jammu & Kashmir is Rs 5,162 crore and Rs 7,728 crore, respectively as of September this year.
Rajasthan has a Rs 37,635 crore overdue amount as of September this year. The state has been sanctioned loans worth Rs 4,063 crore under the scheme. Karnataka has been sanctioned Rs 7,247 crore and Andhra Pradesh Rs 6,600 crore credit facility under the scheme. Karnataka and Andhra Pradesh have overdue amounts of Rs 8,912 crore and Rs 3,933 crore, respectively as of September this year.
Punjab has been sanctioned a credit facility of Rs 4,000 crore under the scheme while Bihar and West Bengal got Rs 3,503 crore and Rs 1,021 crore respectively, the source added. The package would help to reduce outstanding dues of the discoms considerably. Besides, it would reduce stress on the power generation companies (gencos) and transmission companies (transcos) as their payments are stuck with discoms.
Besides the package, in order to give relief to gencos, the Centre had enforced a payment security mechanism from August 1, 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply. The central government had also given moratorium to discoms for paying dues to power generating firms in view of the COVID-19-induced lockdown. The government had also waived the penal charges for late payment of dues.