Telangana Energy Minister Mallu Bhatti Vikramarka has stated that the previous Telangana Government is responsible for putting the Discoms (distribution companies) in a debt trap due to their poor fiscal policy in the energy sector.
In a White Paper released on the power sector, the minister explained that the Discoms have been consistently borrowing money, which has now reached unsustainable levels. The Discoms are struggling to continue funding the purchase of power through these borrowings because the government has failed to pay its dues and commitments to the sector.
Despite the financial imprudence of the past, the government is committed to providing reliable and high-quality power to the people of the state. They aim to overcome the challenges faced by the sector with a responsible and transparent approach.
As of March 31, 2023, the accumulated losses of the Discoms amount to Rs. 62,461 crore. Additionally, they have a debt of Rs. 81,516 crore (as of October 31, 2023). Out of this debt, Rs. 30,406 crore has been borrowed as working capital primarily to pay power charges to the generators. However, there are still Rs. 28,673 crore of generation and transmission dues that remain unpaid by the Discoms.
The difficulty faced by the Discoms in paying power purchase bills has been worsened by the government’s default in paying the power bills of its own departments. This default has now accumulated to Rs. 28,842 crore. A significant portion of this amount is due from lift irrigation projects alone, which amounts to Rs. 14,193 crore. Furthermore, the government’s failure to pay committed true-up charges of Rs. 14,928 crore has further contributed to the worsening financial situation of the Discoms.
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