Rs 90,000-crore discom loss projections for FY21 ‘grossly inflated’: Power ministry

Projections by certain quarters that financial losses of state-run power distribution companies (discoms) might have surged to Rs 90,000 crore in FY21 are “grossly inflated”, the Union power ministry said on Wednesday. A report released by Icra in March had indicated that discom losses may have increased to Rs 90,000 crore in FY21. Subsequently, a report co-authored by Niti Aayog and energy think tank RMI released in early August has also estimated the loss figure to be at similar levels.

The rise in losses have been attributed to the possible drop in the revenue of discoms in FY21, with demand from high-paying industrial and commercial consumer segments getting disrupted amid the lockdowns to contain the coronavirus. Industrial and consumer segments traditionally contribute more than 70% of discoms’ revenue, but use about 50% of the overall electricity supplied.