India’s power distribution sector facing debt pile of over Rs 4 lakh crore: ADBI

A recent government survey has highlighted that more than 50 per cent of households in the country receive less than 12 hours of electricity in a day

The distribution segment of India’s power sector is experiencing a huge financial stress with debt amount touching a gigantic Rs 4.3 lakh crore, largely due to delayed payments, issues around tariff rationalization, and constraints emanating from subsidy disbursement, according to a working paper from Asian Development Bank Institute (ADBI).

“The policy efforts to restructure the debt of distribution companies (discoms) through the UDAY scheme do not appear to be producing the desired outcomes. Lately, it has become apparent that deep-seated malaise exists and that the solutions offered through schemes like UDAY are temporary and adhoc in nature,” said the ADBI working paper

According to the paper, the sector continues to suffer from problems of poor quality of power and reliability of the supply, with provisioning of six hours of power supply becoming the norm rather than the exception in rural areas of the country. Read more

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