The credit profiles of state-owned power distribution companies (discoms) continue to remain stressed due to higher level of aggregate technical and commercial (AT&C) losses compared with regulatory norms, inadequate tariffs in relation to their cost of supply, and inadequate subsidy support from the respective state governments, a new report by credit rating agency Icra has said. As a result, debt levels of discoms have again gone up post the implementation of UDAY (Ujwal Discom Assurance Yojana) by government of India in FY2016 and are now estimated at close to Rs6 trillion in FY22.
This apart, there has been a build-up in dues to power generators by 30% to Rs1.27 trillion as of December 2020 on a year-on-year (y-o-y) basis.
