NEW DELHI: Discoms (electricity distribution companies) outstanding contributions have fallen by more than 32% in almost a year since May 2022 Department of Energy introduced the late payment surcharge (LPS) Review regulation to introduce payment discipline in government utilities.
According to the ministry, the total outstanding contributions from the discoms are on Gencos (generation) and transcos (Transmission) company at Rs 92,759.7 crore on 21 May versus Rs 1.38 lakh crore on 3 June 2022 when the rule was announced.
The sharp drop in total outstandings points to the timely payment of Discoms to Gencos and Transcos, a major issue that has clouded the viability of the energy sector and potentially impacted the banking sector.
The increasing payment discipline is confirmed by data indicating that Rs. 26,468 crore or 28% of the total outstanding balance is overdue and Rs. 66,243 crore or 71% is in progress. By contrast, prior to the introduction of the LPS rule, the outstanding amount of the gencos was over Rs 1 lakh crore.
Under the LPS rule, if they fail to pay the ongoing charges within one month of the due date or two and a half months after the invoice is presented by Gencos or Transcos, whichever is later, Discoms will lose access to power on spot or term contracts.
Simultaneously with the LPS rule, the Department had also offered Discoms an installment program for paying off overdue debts with loans from sectoral lender PFC to update the cycle to the current billing.
According to the ministry, the total outstanding contributions from the discoms are on Gencos (generation) and transcos (Transmission) company at Rs 92,759.7 crore on 21 May versus Rs 1.38 lakh crore on 3 June 2022 when the rule was announced.
The sharp drop in total outstandings points to the timely payment of Discoms to Gencos and Transcos, a major issue that has clouded the viability of the energy sector and potentially impacted the banking sector.
The increasing payment discipline is confirmed by data indicating that Rs. 26,468 crore or 28% of the total outstanding balance is overdue and Rs. 66,243 crore or 71% is in progress. By contrast, prior to the introduction of the LPS rule, the outstanding amount of the gencos was over Rs 1 lakh crore.
Under the LPS rule, if they fail to pay the ongoing charges within one month of the due date or two and a half months after the invoice is presented by Gencos or Transcos, whichever is later, Discoms will lose access to power on spot or term contracts.
Simultaneously with the LPS rule, the Department had also offered Discoms an installment program for paying off overdue debts with loans from sectoral lender PFC to update the cycle to the current billing.
