NEW DELHI: Even as the national Aggregate Technical & Commercial (AT&C) losses of electricity have reduced to 15.37% in 2023 from 27.8% in 2008-09, many states have continued to high losses even in the past five years. This may hamper the reduction of losses to 12-15% as targeted by 2024-25, according to a report by the Lok Sabha’s Standing Committee on power ministry.
The Committee noted that AT&C losses have increased for the states of Jharkhand, Maharashtra, Mizoram and Telangana during the last five years. Further, Arunachal Pradesh, Chhattisgarh, Gujarat (Uttar Gujarat Vij Company Limited and Paschim Gujarat Vij Company Limited), Jharkhand, Madhya Pradesh (MPWest), Maharashtra (MSEDCL), Mizoram, Nagaland, Puducherry, Sikkim and Tripura have reduced their losses, but were not able to meet the targets for AT&C losses in the year 2023.
“The Committee feels that increase in AT&C losses in the states like Maharashtra and Telangana is a cause for concern as this trend may hamper the reduction of AT&C losses in the country to the level of 12-15% by the stipulated date,” it said. “The Committee, therefore, recommends that the ministry should take this matter up with the concerned states/DISCOMs so as to avoid further deterioration of the condition related to AT&C Losses in these states.”
The all-India AT&C losses for state-owned discoms declined to 15.8% in FY23 from 23% in FY21 and 16.5% in FY22 led by infrastructure upgrades and higher subsidy pay-out. However, despite this, losses remain particularly high at over 20% for the discoms in Bihar, Jharkhand, Madhya Pradesh, Odisha and Uttar Pradesh, as per an earlier report from Icra.
“Despite an uptrend in tariff hikes in a few states in recent years, discoms continue to incur losses due to increase in power purchase costs, operating inefficiencies in a few large states, and a high debt burden,” Vikram V, Vice President & Co-Group Head – Corporate Ratings, Icra had said. “The median 5-year CAGR for power purchase cost was over 5.0% for the period leading up to FY23, whereas the increase in tariffs has been lower.”
In FY23, the financial losses of state-owned discoms at an all-India level stood at Rs 62,386 crore against Rs 31,000 crore in FY22, as per the data provided by Icra.
Additionally, the utilization of funds under Revamped Distribution Sector Scheme has been suboptimal, as per standing committee’s report. The finance ministry has allocated Rs 12,585 crores in 2024-25 for the scheme out of which Rs 8,517.38 crores have been utilized as on September 30, 2024.
The Committee said that around 51% of the sanctioned smart meters and 75% of the sanctioned infrastructure works have been awarded under the scheme; but only 12% of the overall physical progress has been achieved till date. The balance works are under different stages of the tendering process. The scheme also aims to install 25 crore smart meters by the year 2025-26. The Committee noted that only 130.94 lakh smart meters have been installed in the country so far.
“Since only about 16 months are left as the sun-set date for this scheme is March 31, 2026; the Committee recommends that the Ministry should expedite the implementation of the Revamped Distribution Sector Scheme so that stipulated targets are achieved within the given timeline,” the report said.
The scheme has an outlay of Rs 3,03,758 crores with a Gross Budgetary Support of Rs 97,631 crores over a period of five years from FY22-26. So far, a total of Rs 17,400 crores have been allocated for RDSS during the first 3 years of which Rs 13,616 crores could actually be utilized during these years which accounts for only 78.25% of the allocation.
Source: The Financial Express
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