Discoms are showing green shoots of turnaround
Discoms are showing green shoots of turnaround

Reports of discom loss levels at Rs 90,000 crore grossly inflated: govt

ANI | Updated: Aug 18, 2021 16:39 IST

New Delhi [India], Aug 18 (ANI): The Ministry of Power said on Wednesday that reports about power distribution companies (discoms) achieving loss levels of Rs 90,000 crore in FY2021 seem to be grossly inflated.
Media reports relying on this misleading projected figures of discom losses by ICRA do not take into cognizance the fact that under the current regulatory system of electricity tariff determination, a mechanism of true-up's already exists that would allow recoveries of losses arising due to change in consumer category-wise consumption patterns coming with Covid induced lockdowns to be covered through tariffs in the subsequent year.
The ICRA has also alluded to this aspect in their report. However, this nuanced position has not been reflected in media reports.

"The adverse performance of discoms across the country already seem to have gone past the inflexion point, and are showing green shoots of turnaround," said a statement issued by the Ministry of Power.
"The measures already taken by the government will further incentivise discoms to reform, perform and transform in an efficient and cost-effective manner."
The ministry said it is discernible that actual PAT figure for FY2020 is almost half of the negative Rs 60,000 crore projected by ICRA for FY2020, thereby indicating that the ICRA estimations of even FY2020 are significantly flawed.
ICRA has further built up the losses for FY 2021 on their erroneously estimated figures of FY 2020 by adding another Rs 30,000 crore due to Covid. No details have been given in the report to cover this increase, said the ministry.