PFC, REC have disbursed Rs 31,000 cr, sanctioned Rs 1.18 lakh cr to discoms so far

• Major state discoms which have benefited from the scheme are UP, Tamil Nadu, Jammu and Kashmir, Telangana, Andhra Pradesh, Rajasthan, West Bengal, Maharashtra etc

• The relief package has been released in two tranches by PFC and REC

New Delhi: State-run Power Finance Corporation (PFC) and REC Limited have so far disbursed around Rs 31,000 crore and sanctioned Rs 1.18 lakh crore to discoms so far under the Rs 1.2 lakh crore liquidity scheme. To alleviate the liquidity problems being faced by discoms, a liquidity infusion scheme under Atmanirbhar Bharat Abhiyan was announced by the government. The scheme mandated PFC and REC to provide funding to discoms to the tune of Rs 90,000 crore for the clearance of their outstanding dues towards CPSU GENCOs and TRANSCOs, IPPs and RE Generators as on March 30, 2020. 

However, based on requests received from discoms, the Ministry of Power extended the outstanding dues timelines to June 30, thereby taking the overall value of the scheme to around Rs 1.2 lakh crore.

UP, TN, J&K, Telangana benefitted from scheme

Major state discoms which have benefited from the scheme are UP, Tamil Nadu, Jammu and Kashmir, Telangana, Andhra Pradesh, Rajasthan, West Bengal, Maharashtra etc. The relief package has been released in two tranches by PFC and REC and both the PSUs are co-funding the loans in equal proportion.

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To avail the above financial assistance, state and discoms have to comply with pre-commitment and pre-disbursement conditions such as installation of pre-paid/Smart meters in government departments, reduction of AT&C and ACS-ARR gap, liquidation of pending subsidy and electricity dues etc which shall help in improving financial condition of discoms.

The backdrop

In the wake of the COVID-19 pandemic, the government announced a number of relief measures to ease the financial stress on discoms, which had already been accumulating dues payable towards power generating companies. The government intervened through provision of rebates worth Rs 2,985 crore to discoms through Central Public Sector Undertakings (CPSUs). The rebates were offered by PSUs (under the administrative jurisdiction of the Ministry of Power in the power generation and power transmission sector) so that they could be passed on to consumers.

Further, the Late Payment Surcharge (LPS) was also slashed from 18 percent to 12 percent on the directions of the Central Electricity Regulatory Commission (CERC) for the period between March 24 and June 30. 

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The total outstanding dues owed by discoms to gencos rose 3.83 percent month-on-month (m-o-m) in September to Rs 1.27 lakh crore. According to an analysis done by PSU Watch of the data available on the Ministry of Power's Praapti portal, the increase in outstanding dues has been consistent, except for an aberration in July. In comparison to the immediate aftermath of the Covid-19 breakout in India, there has been a decline in the percentage increase in dues.

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