Union Power Minister announces reduction of DISCOMs' legacy dues

The Power Minister has announced a significant reduction of DISCOM legacy dues, bringing relief to the power sector and consumers alike. Read on to learn more about this development.

Union Power Minister announces reduction of DISCOMs' legacy dues
Union Power Minister announces reduction of DISCOMs' legacy dues

As per the information available on PRAAPTI portal, the total dues of power distribution companies (DISCOMs) towards Generating Companies as on 28.03.2023 are:

Sl. No.


Amount in Rs. Crore


Balance Legacy Dues (after payment of 8 EMIs)



Current Dues ( Excluding disputed and  before default trigger date)


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State/UT-wise  details of the total outstanding dues owned by Power Distribution Companies (DISCOMs) to Generation Firms (GENCOS) are given at Annexure-I.

Recognizing the cash flow problems arising out of outstanding receivables of Generating Companies from DISCOMs and in order to increase basic payment discipline in the power sector value chain, sustenance of which has been matter of concern due to increasing receivables to GENCOs, Government of India promulgated Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 on 03.06.2022.

These rules entail obligations upon the DISOCMs to clear their legacy dues as existing on 03.06.2022 in a time bound phased manner in equated monthly installments with benefits of non-applicability of late payment surcharge after 03.06.2022. These Rules also provide framework for time bound clearance of current dues through establishment of a Payment Security Mechanism and disincentives of progressive withdrawal of open access as well as power regulations if the provisions of the Rules are not followed.

DISCOMs can avail loans from PFC Ltd. and REC Ltd. to clear their dues to Generating Companies.  With the implementation of Electricity (LPS and Related Matters) Rules, 2022, remarkable improvement has been seen in recovery of outstanding dues. Against legacy dues of Rs.1,38,378 crores as on 03.06.2022, 13 States/ UTs have timely paid installment of Rs.47,317 crores (8 EMIs). Further, 20 States/ UTs reported to have no outstanding dues as on 03.06.2022.

(c) & (d) : As per the “Report on Performance of Power Utilities” published by Power Finance Corporation Limited (PFC), State/ UT-wise details of the gap between Average Cost of Supply (ACS) and Average Revenue Realised (ARR) excluding Regulatory Assets and Ujwal DISCOM Assurance Yojana (UDAY) from FY 2019-20 to 2021-22 are given at Annexure-II.

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State/UT-wise details of the accumulated losses of all DISCOMs in the country from FY 2019-20 to 2021-22 are given at Annexure-III.

Government of India have been implementing various performance linked and result oriented schemes with the objective to have a financially secure, viable and sustainable power sector (distribution segment in particular). Various initiatives undertaken by Ministry of Power (MoP) includes Revamped Distribution Sector Scheme (RDSS), Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, Additional Borrowing space of 0.5% of GSDP to the States linked to power sector reforms, Corporate Governance Guidelines, Additional Prudential Norms for lending by Power Finance Corporation (PFC) Limited and Rural Electrification Corporation (REC) Limited, based on the performance of the utilities, Liquidity Infusion Scheme (LIS) and PM KUSUM Scheme. These initiatives have been designed to tackle financial and operational issues to bring in the desired financial discipline in DISCOMs and State Governments.

In addition to above initiatives, under RDSS, in order to attain the key objective of loss reduction in distribution and to reap the benefits of economies of scale, pre-paid Smart Meters are to be installed in a mission mode.  Pre-paid Smart meters including System Metering are important interventions in reducing distribution losses in the Utilities and in facilitating automatic measurement of energy flows and energy accounting as well as auditing without any human intervention.

Along with installation of pre-paid Smart Metering and the associated Advanced Metering Infrastructure (AMI), System metering at Feeder and Distribution Transformer level with communicating feature would also be taken up to facilitate proper energy accounting every month for identification of high loss areas.

This information was given by the Union Minister of Power Sh. R.K. Singh in the Lok Sabha.

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