The Punjab government has broken its first promise that it made last month after joining the Ujwal Discom Assurance Yojana (Uday), which seeks to improve the financial condition of power distribution companies. It has failed to clear the power bill of its departments.
The public health, irrigation, civic body, water works, and panchayati raj department, besides government hospitals and Punjab Police have an outstanding of Rs 500 crore against them in power bills.
The state government, which signed a tripartite memorandum of understanding with Government of India and Punjab state power corporation limited (PSPCL) on March 4, had agreed to clear the dues by March 30.
The state has also not paid the Rs 1,200 crore of the Rs 5,600 crore power subsidy given during 2015-16 in form of free power to agricultural tube wells, and to schedule caste and below poverty line households.
A PSPCL management official said the government’s failure to clear the dues will lead to extra burden on electricity consumers on account of extra interest burden.
“Interest burden on PSPCL during 2015-16 is about Rs 2,800 crore, which translates into 65 paise per unit tariff to be paid by the consumers,” the official said.
Not all promises under Uday have, however, been disregarded: the government did take over about Rs 10,000 crore of PSPCL’s debt before March 31.
Under Uday, state governments, which own discoms, can take over 75% of the debt and pay back lenders by selling bonds. For the remaining 25%, discoms will issue bonds. All this is aimed at reviving the debt-ridden discoms’ ability to buy electricity.
The Punjab government agreed to take over Rs 10,419 crore (50%) of the debt by March 31, 2016, and another Rs 5,209 crore (25%) by September 30, 2016. The total debt of PSPCL (as on September 30, 2015) is Rs 20,837.68 crore.
In Punjab, the Uday scheme is aimed at lowering the interest burden on PSPCL by Rs 600 crore, which would further prevent consumers from suffering a tariff hike.
But all this only would happen if the government keeps its commitment. The PSPCL official said the discom’s management “tried hard” to get the subsidy and outstanding bills cleared but that the cash-strapped government simply failed to do so.
Secretary of the power department, A Venu Parsad, could not be contacted for comments.
PSPCL’s chairman-cum-managing director KD Chaudhri said the department had taken up the matter with the government. “Hopefully, the pending amount will be released soon,” he said.