New Delhi: The outstanding dues owed by power sector to Coal India Ltd (CIL) has increased by 3.33 percent to Rs 23,335.23 crore in November, official data sourced from the Ministry of Coal showed. The figure was at Rs 22,581.87 crore in October. An analysis of the data for the year 2020 shows that there has been a consistent rise in dues, except for a nominal decline in July. Data also showed that the lockdown imposed to curb the spread of COVID-19 impacted the cash flow in the power sector and resulted in the biggest rise in dues owed to the coal mining company.
At the end of January 2020, the dues owed by the power sector to Coal India was at Rs 12,423.36 crore. The biggest increase in dues payable to CIL came in the month of April when economic activity came to a standstill because of the lockdown imposed to curb the spread of the Covid-19 pandemic. From Rs 14,374.05 crore in March, it rose to Rs 17,000.64 crore in April, registering an increase of nearly Rs 2,600 crore.
The power sector is under financial stress mainly due to discoms' inability to pay power generating companies, which in turn, are unable to pay companies further down the chain, like Coal India, which supplies around 80 percent of its total output to the power sector. The government has announced a liquidity scheme of Rs 1.2 lakh crore for discoms in order to alleviate the financial stress in the sector, however, the package may only suffice in addressing the discoms' legacy dues. The sector has already been in a poor financial state prior to the Covid-19 pandemic, and the subsequent lockdown has severely affected its cash flows.
Data showed that coal dispatch by Coal India to power sector registered a decline of 5.3 percent in the April-November period in comparison to the corresponding period of the previous financial year. The total offtake for the period was 277.46 Million Tonnes (MT). However, for November alone, coal offtake to power sector witnessed a growth of 1 percent year-on-year to 39.38 MT.
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