The accumulated deficit of Discoms across the country rose to ₹6.92 lakh crore in FY24 from around ₹6.46 lakh crore in FY23, with Tamil Nadu, Uttar Pradesh, Rajasthan, Madhya Pradesh and Telangana having higher deficits.
According to data shared by the Minister of State for Power, Shripad Naik, in the Lok Sabha, the accumulated deficit of Discoms rose by more than 7 per cent Y-o-Y to around ₹6.92 lakh crore during April 2023 to March 2024.
Naik said the Reserve Bank of India’s report, ‘State Finance – A Study of Budgets of 2024-25’ stated that the total accumulated losses of Discoms hit ₹6.5 lakh crore in FY23, which is 2.4 per cent of India’s GDP.
“The primary reason for the increase in financial losses of state-owned Discoms in FY23 was non-implementation of the Fuel and Power Purchase Cost Adjustment (FPPCA). Other major reasons include a delay in issuance of tariff orders, poor billing and collection efficiency, under-recovery of electricity dues of state government departments/ local bodies and the tariff subsidy,” he added.
Accumulated deficit
Tamil Nadu’s deficit rose to around ₹1.67 lakh crore in FY24 from ₹1.63 lakh crore in FY23. It was followed by Rajasthan with an accumulated deficit that fell marginally to ₹91,565 crore from ₹92,070 crore.
The accumulated deficit of Uttar Pradesh, which is at the third spot, rose to ₹89,662 crore in FY24 from ₹82,556 crore in FY23, while that of Madhya Pradesh accelerated to ₹69,301 crore from ₹65,291 crore.
Telangana had the fifth highest accumulated deficit in FY24 at ₹67,276 crore, compared to ₹60,922 crore a year-ago.
However, Gujarat and Delhi were among states that reported a surplus in the last financial year. Gujarat’s accumulated surplus stood at ₹5,165 crore in FY24, against ₹935 crore in FY23, while Maharashtra’s surplus was ₹561 crore, against ₹1,580 crore during the same period.
Delhi reported a surplus of ₹12,893 crore in FY24, compared to ₹11,591 crore in FY23, whereas Odisha reported a surplus of ₹824 crore, against ₹517 crore.
Checking losses
Naik emphasised that the Ministry is supporting Discoms in improving their performance through various initiatives.
“Rules for implementation of FPPCA and cost reflective tariff have been notified to ensure that all prudent costs for supply of electricity are passed through,” he added.
An additional borrowing space of 0.5 per cent of GSDP has been allowed to the states if their Discoms implement loss reduction measures. Besides, additional prudential norms are now available for sanctioning loans to state-owned power utilities, contingent on the evaluation of the performance of Discoms against prescribed parameters, he added.
The Revamped Distribution Sector Scheme (RDSS) is also aiding in improving the quality and reliability of power through a financially sustainable and operationally efficient distribution sector.
As a result, the Aggregate Technical and Commercial (AT&C) loss of Discoms at the national level has reduced from around 22 per cent in FY21 to about 16.28 per cent in FY24, the Minister noted.
The gap between the Average Cost of Supply and Average Revenue Realized (ACS-ARR Gap) reduced from Rs 0.71 per kWh to Rs 0.19 per kWh during the same period, Naik added.
