InvestorQ : Have the power sector losses come down after the government announced a special funding by REC and PFC?
Lavanya Subramanian made post

Have the power sector losses come down after the government announced a special funding by REC and PFC?

Answer
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Anamika Sodhani answered.
1 week ago


While the Rs.90,000 crore funding package announced in May was intended to reduce the level of outstanding dues to the power generators, there has clearly not been much progress. The distributor outstanding to GENCOS has been rising continuously.

In fact, if you look at the data for Jul-20 end, the outstanding to GENCOS from distributors is up 36% to Rs.129,000 crore. These distributors are typically the state electricity boards which are anyways under such tremendous strain to T&D losses that they are under stress.

One can argue that this figure is marginally lower than the outstanding of Rs.130,118 on Jun-20 but that is small consolation. The challenge is that 90% of this amount is overdue; meaning it has crossed the 60 days of grace that is given to these discoms.

Back in May the government had announced Rs.90,000 crore funding infusion for discoms from PFC and REC. Now that may be hiked to Rs.125,000 crore Discoms in Rajasthan, Uttar Pradesh, Telangana, Andhra Pradesh, Karnataka and Tamil Nadu account for bulk of dues.