Outlook negative for power discoms due to falling revenues: ICRA

The outlook for electricity distribution segment remains negative with continued weakness in financial position of most state-owned distribution utilities (discoms), according to a report by ICRA.

This is due to a mix of issues including a high level of technical and commercial losses, inadequate tariffs in relation to their cost of supply and delays in receiving shortly from state governments.

The discom finances have been adversely impacted by a sharp decline in revenues from commercial and industrial customers in Q1 FY21 because of lockdown restrictions. Besides, lack of tariff revisions is estimated to widen the revenue gap for discoms at all-India level by Rs 30,000 crore in FY21.