Jan 2021: Power sector dues to Coal India spurts by whopping Rs 1,572 cr in a single month

• The figure stood at Rs 24,728.62 crore in January, up from Rs 23,156.01 crore in December 2020

• The increase of Rs 1,572.61 crore in January is the second highest rise in power sector dues in the current financial year

New Delhi: After registering a nominal decline in December 2020, dues owed by power sector to Coal India Ltd (CIL) has increased by a whopping Rs 1,572.61 crore in January, data sourced from the Ministry of Coal showed. The figure stood at Rs 24,728.62 crore in January, up from Rs 23,156.01 crore in December 2020. In November 2020, power sector dues payable to Coal India were at Rs 23,335.23 crore and had recorded a decline of Rs 179.22 crore in December 2020. The increase of Rs 1,572.61 crore in January is the second highest rise in power sector dues in the current financial year.

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Earlier, the largest increase in dues payable to CIL by the power sector 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.

Stress in power sector: Dues payable to CIL mounts

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.

Coal despatch to power sector by CIL down by 7.4% in Jan 2021

According to official data, coal despatch to power sector continued to register negative growth as it dropped by 7.4 percent in January 2021 in comparison to January 2020. The figure for January 2021 was 40.429 Million Tonnes (MT) as opposed to 43.638 MT in January 2020. The cumulative coal despatch to the power sector in the April-January period was down by 5.8 percent at 357.540 MT as opposed to 379.56 MT in the corresponding period of the previous fiscal year.

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