Delayed subsidy, poor billing inflated discom losses in FY19

Delayed subsidy disbursal by the state governments, inefficient billing and tariff collection and inadequate tariff hikes were the main reasons behind the power distribution entities’ (discoms) financial losses surging 83% to Rs 61,360 crore in FY19, an analysis by PFC showed. Losses of five states — Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Telangana and Uttar Pradesh — comprised 88% of the total discom losses in the country, PFC noted.

The difference between the cost of power supply and revenue realised (ACS-ARR gap) widened in all these five states in FY19, with them losing more money for every unit of electricity sold amid 7.5% growth in supply volumes, resulting in higher losses.

According to the latest report, state governments released 89.4% of the subsidy booked by their respective discoms, significantly lower than the 95.6% disbursed in FY18

financial express
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