Explainer: Payment defaults cripple power sector
State-run power utilities make losses in many countries and so do other public utilities like the railways. But the losses in India are very high and fiscally unsustainable.
Prime Minister Narendra Modi has recently called upon the states to pay the money they owe to the gencos and discoms on time. “About Rs 2.5 trillion of power gencos and discoms’ money is trapped,” he said. As the unpaid dues have crippled the discoms, they are unable to invest in upgradation of infrastructure in the distribution chain, which is essential for reducing distribution and transmission losses in many states. Deepa Jainani takes stock.
