“The inability of power distribution companies to clear dues is affecting the entire chain of power sector,” the ministry said in a statement.
Delay in payment to the generating companies of discoms impacts the cash flow. Production companies need raw materials like coal and adequate working capital for day to day operating expenses.
As on May 18, 2022, the dues (excluding disputed amount and late payment surcharge) on distribution companies stood at Rs 1,00,018 crore, according to data from the Ministry’s Pratiy Portal. While the Late Payment Surcharge (LPSC) stood at Rs 6,839 crore.
With the proposed scheme, the distribution companies will be able to pay the financial dues in easy installments.
One-time exemption is being considered for all discoms. Under this the dues (including principal and LPSC) will be blocked from the date of notification of the scheme. There will be no further late payment surcharge on this.
The distribution companies will be given the facility to pay the outstanding amount in 48 installments.
Allowing the discoms to make payment of the outstanding amount in installments without levying surcharge for late payment will help the DISCOMs to improve their financial position.
On the other hand, the power generation companies will get the stuck amount in the form of fixed monthly payment, which will give relief to them.
According to the statement, however, in case the discoms delay the monthly payment, in such a situation, late payment surcharge will be levied on the entire outstanding amount.
With this proposed scheme, distribution companies will be able to save Rs 19,833 crore as surcharge on late payment over the next 12 to 48 months.
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