india: Discom debt surges 24% to Rs 6.2 lakh crore in 2021-22

The total debt of the power distribution sector in India rose to ₹6.20 lakh crore in 2021-22, up 24% from 2019-20. However, the pace of debt addition slowed down over the two years, said an annual report on the sector from Power Finance Corporation Ltd.

The sector’s debt rose ₹33,800 crore in 2021-22, 60% less than the ₹85,500-crore increase in the previous financial year, the report said.

The sector’s financial deficit nearly halved in 2021-22 from 2019-20, following tariff increases, loan takeover by state governments, and improvement in subsidy disbursement and bill collections.

Financial deficit is an important indicator of the financial health of the sector. The report calculated the deficit on a cash-adjusted basis, where the focus was on capturing cash flows instead of revenue accrued. It compared 2021-22 performance with the previous two fiscals due to the impact of Covid-19.

Discom Debt Surges to ₹6.2 Lcr

Aggregate technical and commercial losses of power distribution companies fell 5 percentage points to 16.5% in 2021-22 from 2020-21 and 3.4 percentage points from a year before.

Capital expenditure addition fell to ₹48,000 crore in FY22, compared with ₹59,000 crore a year earlier and ₹83,000 crore in 2019-20, the report said, raising concern.

The sector needs to actively focus on upgrading its billing infrastructure for long-term gains, it said.

Subsidy disbursement by state governments was 102% of the amount booked in 2021-22, compared with 85% a year earlier and 95% in 2019-20.

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