State-owned energy distribution corporations (discoms) posted losses of Rs 32,898 crore in FY19-20, the Power Ministry mentioned in a press release on Wednesday in response to estimates that pegged the losses at Rs 60,000 crore for FY20 and about 90,000 crore for FY21. The Ministry mentioned a loss estimate of Rs 90,000 crore for state discoms in FY21 was “grossly inflated”. The NITI Aayog had additionally used the estimate in its report on the ability distribution sector printed in August.
“… actual PAT figure for FY2020 is almost half of the negative ~Rs 60,000 crore projected by Icra for FY2020, thereby indicating that the Icra estimations of even FY2020 are significantly flawed. Icra has further built up the losses for FY2021 on their erroneously estimated figures of FY2020 by adding another Rs 30,000 crore due to Covid,” the Ministry mentioned. It didn’t, nonetheless, present any information on precise losses for discoms in FY21. The Ministry mentioned Icra could have assumed {that a} Rs 30,000-crore improve in discom dues to collectors between March and December 2021 mirrored further losses for discoms noting that the rise was really a results of money move issues.
“As a result of the above erroneous projections by Icra, the loss figures of Rs 90,000 crore for FY2021 seem to be grossly inflated,” the ability ministry mentioned.
Icra mentioned its estimate of internet losses of Rs 56,000 crore for FY20 was based mostly on continued excessive distribution losses for discoms and that tariff revisions had remained muted over the previous three years.
“We would able to reconcile our estimated loss figures for FY2020 with the loss estimates for FY2020 reported by the Ministry of Power only after detailed accounts prepared by PFC (Power Finance Corporation) are available. It would be especially important to look at the regulatory assets and grants booked by the discoms for FY2020,” Icra mentioned in an official assertion. Discoms can ebook regulatory property for prices incurred in a selected fiscal permitting them to decrease general losses for a fiscal with a view to recovering these prices from customers sooner or later.
The Ministry had famous that by the true-up mechanism, discoms would be capable of recuperate losses attributable to change in consumption patterns as a result of pandemic by tariffs in subsequent years and that Icra had additionally famous this in its report. “To the extent that such revenue losses claimed by discoms are approved by the SERCs (State Electricity Regulatory Commissions) under the true-up, the incremental revenue gap of discoms would be lower than the Rs 30,000 crore estimated by Icra,” the rankings company mentioned including that any compensation by state governments by means of subsidies or grants might additionally end in decrease booked losses for discoms.
The Cabinet, in June, introduced a Rs 3.03 lakh crore incentive-based scheme to strengthen monetary place of discoms. The authorities is aiming to chop industrial losses within the vary of 12-15 per cent and cut back the distinction between the typical price of provide and common income realised to zero by FY25.
Aiming to chop losses
The authorities is aiming to chop industrial losses within the vary of 12-15 per cent and cut back the distinction between the typical price of provide and common income realised to zero by FY25.
