State-run electricity distribution entities (discoms), which had saved a substantial Rs 34,000 crore on interest costs due to the UDAY scheme in the two years ended December 2018, seem to be on a belt-tightening mode. According to data reviewed by FE, fresh borrowings by discoms of 12 major states in the 18 months ended Match 31, 2018 was only Rs 1.2 lakh crore, one-fifth lower than anticipated by the Union power ministry.
Borrowings were expected to be higher given these discoms’ combined accumulated losses of Rs 66,436 crore (which is usually financed entirely via fresh borrowings) during the period and the allowed working capital limit of Rs 87,595 crore (banks and financial institutions could lend only 25% of a discom’s revenue in the previous year as working capital).
