About Rs.2,50,000 crore are the dues accumulated by various state electricity distribution companies (discoms) across the country and Maharashtra has the lion’s share of around Rs.74,000 crore in this grim scenario. The main reason for the losses is lack of a vigorous recovery mechanism and failure to prevent technical and commercial (T&C) losses.
Successive governments in the state have failed to seal the leakages on these two accounts. Those responsible for activities ranging from the generation of electricity to the door-to-door delivery always look at short-term political gains, destroying health of the economy in the long run.
This is precisely what Prime Minister Narendra Modi meant when he inaugurated the ambitious Nagpur-Mumbai expressway’s first leg on Sunday. Popularly known as ‘Revadi Culture,’ the increasing trend among political parties to make offers like free electricity or power will be counter-productive in the years to come, Modi has warned. However, given the quest for political power at any cost, few politicians are expected to take this warning seriously.
As far as the state is concerned, the Maharashtra State Electricity Distribution Company Limited (MSEDCL) is India’s largest power supply utility. At the same time, it is the largest discom in the red. The financial trouble has been aggravated as its pending arrears for non-payment of bills have reached a whopping Rs.74,000 crore mark. Its liabilities also have been skyrocketing to cross the Rs.46,000 crore mark.
It is important to note how the rulers look at such serious issues casually. MSEDCL is the best case to illustrate this attitude. A year ago, Maharashtra’s energy minister Nitin Raut had warned that that if the issue was not resolved on a war footing, the entire state may have to face darkness. He then suggested a solution. He said, “To come out of the difficult situation, the state government has decided to appoint a consultancy firm.” Of course, nothing was done and the default amount keeps on increasing every day.
Although the rulers can take any decision, the state energy department has to run the show. Otherwise, there will be widespread unrest. To overcome the crisis, the department sought a loan guarantee of Rs.20,000 crore and requested to provide another Rs.12,000 crore against the subsidy, for operating various schemes and the dues pending from public water supply utilities. But no steps have been taken to recover the dues.
At least Rs.14,000 crore has increased over the past two years during the Maha Vikas Aghadi (MVA) regime. The dues under the previous government were of Rs.36,000 crore. The remaining about Rs.25,000 crore has been unrecovered for a long time.
The issue of non-payment of electricity bills was discussed in September 2021 at a cabinet meeting, when some ministers opposed disconnection of power supply to defaulting farmers. There is a logic for this stand as absence of electricity during the harvesting season can lead to serious consequences for the farming community. In view of this, deputy chief minister Devendra Fadnavis has asked the discom not to cut power for non-payment of bills. It is imperative that this is a temporary measure and a lasting solution needs to be structure.
No expert is needed to understand that non-recovery of the amount could lead to a big question mark on the survival of MSEDCL, a fully-owned state government utility. According to MSEDCL statistics, the largest slice of arrears of around Rs.50,000 crore is pending from agriculture pumps. Surprisingly, the recovery rate of dues from the farmers is just 3 percent. Which proves that no efforts have been made to make farmers aware that the electricity they consume for agricultural pumps needs to be paid for.
Referring to this sordid situation, Modi had told the closing ceremony of ‘Ujjwal Bharat Ujjwal Bhavishya – Power @2047’ programme recently that if the common man could pay their electricity dues regularly, it was vexing why some states failed in paying their dues. “I request the states to clear them as soon as possible. the health of the electricity sector is everyone’s responsibility.”
Modi’s warning has come at a time when India has been facing a severe coal shortage. The situation can reach a crisis point, especially for domestic thermal power plants. The power ministry has been urging states to clear their bills due to Coal India Limited (CIL), to generating companies and to discoms to ensure continuous electricity generation and distribution.
Modi is criticised by some opposition parties for giving a political colour to the issue. They remind that the Aam Aadmi Party (AAP) had urged voters in other states to replicate its Delhi model of ‘free electricity’ for low consumption users in Gujarat and Himachal Pradesh. Fortunately, AAP miserably failed to make any dent in both states.
AAP first launched the large-scale power subsidy scheme in Delhi after it was elected to rule the capital in 2015. The scheme benefits 86.60 percent of the domestic consumers, according to AAP. The scheme is now implemented in Punjab, won by AAP. Some political parties have made similar poll promises in their manifestos.
Modi has made it clear that the looming threat needs to be considered urgently. He said in Nagpur, “With the passage of time, a serious disorder has come into our politics. This strategy may sound like good politics in the short term. But it is like postponing today’s challenges for tomorrow, for our future generations. This thought process has pushed the power sector in many states into huge problems.”
The losses in India’s power distribution sector are in double digits whereas in developed countries, they are in a single digit. This shows that India has a lot of wastage of electricity. Therefore, the country has to generate more electricity than it actually needs. Still, there is little investment in T&C losses in many states while emphasis is on power generation.
Modi had cautioned voters against those trying to attract votes by promising ‘free revadis’ (freebies). The practice is harmful for the country and has to be wiped out from politics, he said.
In a bid to rescue the power sector, Modi has launched the Revamped Distribution Sector Scheme with an outlay of over Rs.3 lakh crore for a period of five years till FY 2025-26. The scheme will provide financial assistance to the ailing discoms for modernisation and strengthening of distribution infrastructure.
But it needs to be understood by the states that they are primarily responsible for improving their power sector. As a leading state of the country, Maharashtra needs to pioneer such a campaign.
A Column By
Dilip Chaware – Senior Editor
A media professional for 43 years, with extensive experience of writing on
a variety of subjects; he is also a documentary producer and book author.
