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UPPCL losing ₹80 crore per day but parties promising free power
As political parties go about promising free electricity to brighten their own electoral prospects in Uttar Pradesh’s upcoming assembly elections, the UP Power Corporation Ltd. (UPPCL), with fast-deteriorating financial health, may have difficulty delivering free electricity unless heavily subsidised by the government, people in the know said.
Even as political parties are going about promising free electricity to brighten up their own electoral prospects in the forthcoming Uttar Pradesh assembly elections, the UP Power Corporation Ltd (UPPCL), with fast-deteriorating financial health, may find it difficult to follow the free power mandate unless heavily subsidised by the government, people in the know of things said.
The voting for the first phase in UP will take place on February 10 and political parties like the Aam Aadmi Party (AAP), Samajwadi Party (SP) and Congress have already sought to woo voters with the free electricity gamble.
The UPPCL, according to a presentation made in a meeting chaired by chief secretary DS Mishra here on Wednesday, suffers a loss of around ₹80 crore every day on account of a gap between the cost of electricity it buys from producers and the revenue it gets from consumers.
The presentation showed that while UPPCL’s monthly revenue collection was only ₹4,098 crore, it spent ₹5,231 crore to purchase electricity from different sources to meet the power demand of the state.
In 2020-21, for example, the corporation’s total income from all sources stood at ₹62,045 crore against the expenses of ₹78,205 core, leaving it with a gasping loss of ₹16,160 crore in a single year.
Of the total ₹78,205 crore spent during 2020-21, around ₹63,000 crore was spent on power purchase alone though the UPPCL is yet to start providing 24X7 electricity to all consumers.
“The average monthly gap between the profit and loss is as high as ₹2,419 crore per month or ₹80 crore per day,” the presentation said, adding “the corporation’s accumulative losses till the financial year 2000-21 were startling ₹70,454 crore.
The UPPCL, according to the same document, has working capital loan of ₹66,277 crore and capex loan of ₹11,105 crore pending against it besides it owing ₹26,419 crore as outstanding to power producers.
“The UPPCL’s financial position may not allow it to provide free power in as large a state as UP despite many political parties wooing voters with the promise of free electricity to them,” a senior energy department official said on condition of anonymity.
“Free power may be possible only if the government provides heavy cash subsidy to the UPPCL but doing so will not be an easy task for any government,” he added.
Addressing an election rally on Sunday, AAP chief and Delhi chief minister Arvind Kejriwal reiterated his party’s promise of providing free power up to 300 units in UP if voted to power, saying his government was already doing this successfully in Delhi.
Earlier, SP chief Akhilesh Yadav also made similar promise saying that, if voted to power, his government would provide300 units of free electricity to each household and completely free power to farmers for agriculture purpose. The Congress, too, has promised waiving off pending power bills of consumers and reducing the upcoming ones to half.
The ruling BJP has, however, not made free power promise so far though last month it did halve power tariff applicable to farmers’ tube wells. The party is expected to declare its manifesto in a day or two and many voters must be watching keenly if it also joins the race.
