Power technocrats disappointed with Union Budget 2019

Virendra Singh Rawat
Lucknow / July 9, 2019

All India Power Engineers Federation (AIPEF) has termed Union Budget 2019 as disappointing for the power sector and public sector utilities.

The Federation, which represents 1.5 million public sector electricity engineers and employees, lamented finance minister Nirmala Sitharaman did not offer any roadmap to reduce mounting debt on distribution companies (discoms).

Besides, AIPEF observed the proposal of ‘One Nation One Grid’ formula was useful only when all state power utilities were integrated into single entity.

AIPEF chairman Shailendra Dubey said although she had mentioned UDAY (Ujwal Discom Assurance Yojana), however, the flagship scheme failed to achieve its purpose in the first place due to ‘wrong’ policies of the Centre.

The Centre had launched UDAY in 2015 for the financial and operational turnaround of discoms. In her Budget speech, the finance minister had said the Centre was examining the performance of the scheme with a view to working with the states to remove barriers like Cross Subsidy Surcharge.

“The fact is that the combined debt of discoms is set to rise to pre-UDAY levels of Rs 2,60,000 crore by March 2020 from Rs 2,28,000 crore in March 2019 and Rs 1,85,000 crore in March 2018,” Dubey warned. The consolidated debt of discoms in India was Rs 2,75,000 crore in September 2015 and fell to Rs 1,94,000 crore trillion in March 2016 post-UDAY.

He said while the power ministry agreed discoms alone could not be blamed for rising debt and liabilities, since electricity tariffs often did not keep pace with the rising input costs, yet the Union Budget contained no roadmap for the turnaround of the beleaguered discoms.

Blaming the lopsided government policies for piling debt on discoms, Dubey claimed a review document of UDAY last month had showed that government departments and urban local bodies (ULB) alone accounted for power dues of Rs 41,386 crore for the first nine months (Apr-Dec) of 2018-19 fiscal.

Interestingly, discoms’ overdue payment to power stations during the same period stood at merely Rs 22,061 crore or nearly half of pending receivables on various government departments and ULBs.

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