The implementation of the Electricity (LPS and Related Matters) Rules, 2022, has led to a substantial decrease in outstanding dues owed by distribution companies (DISCOMs), plummeting from Rs. 1.4 lakh crores in June 2022 to less than Rs. 50,000 crores as of January 2024, Power and New and Renewable Energy Minister R K Singh said in a written reply to a question in Lok Sabha on February 8, 2024.
The total outstanding dues of States, which were at Rs. 1,39,947 crores as on 03.06.2022, have reduced to Rs. 49,452 crores after timely payment of eighteen (18) monthly installments as on 31.01.2024, mandated by the new rules.
The Electricity (LPS and Related Matters) Rules, 2022, have not only facilitated the liquidation of outstanding dues but also ensured prompt payment of current dues, fostering financial discipline within DISCOMs. This, in turn, is expected to encourage investment in the sector and ensure uninterrupted electricity supply to consumers.
The government has implemented a range of performance-linked and result-oriented schemes aimed at bolstering the financial viability and sustainability of the power sector, especially within the distribution segment.
These measures encompass timely subsidy payments by state governments, tariff updates, ensuring energy accounting and audit, prompt payments to power generation companies (GENCOs), enforcing revised prudential norms for DISCOMs and GENCOs, offering incentives for loss reduction, executing infrastructure projects under schemes like DDUGJY, IPDS, and SAUBHAGYA, which include substation addition and upgrades, distribution transformer installation, and feeder separation.
Additionally, the government has launched the Revamped Distribution Sector Scheme (RDSS) to enhance power supply quality and reliability through financial sustainability and operational efficiency.
The RDSS, with an outlay of Rs. 3,03,758 crore and government support of Rs. 97,631 crores over five years, aims to sanction infrastructure works and smart metering projects to enhance the financial viability of DISCOMs and benefit consumers.
Additionally, measures have been put in place to restrict funds for loss-making DISCOMs under government power sector schemes unless they implement measures for loss reduction.
