Power subsidy non-payment: Punjab government buys time, PSPCL lives off loans
Punjab govt owes Rs 5,100 crore to power corporation which has borrowed Rs 1,800 cr this financial year to meet day-to-day expenses.
With the cash-strapped state government delaying the payment of Rs 5,100 crore bill raised on account of free power subsidy given to famers, the Punjab State Power Corporation Limited (PSPCL) has taken Rs 1,800 crore loan to meet its expenses in the current financial year.
Not only this, the power corporation is planning to take another loan of Rs 1,000 crore in the next few days to clear electricity purchase payments which attract heavy interest if disbursement is delayed. Of the Rs 1,800 crore borrowed so far in the 2017-18 financial year, Rs 150 crore was taken on Monday.
The next meeting on financial management will be held on March 9.
Against the Rs 5,866 crore pending power subsidy bill which the Punjab government has to pay this month, only Rs 100 crore was paid. In the last six months, the government has paid Rs 350 crore in cash and made book adjustments of electricity duty and on other accounts.
Therefore, the PSPCL still has to get the payment of Rs 5,100 crore. Of this, Rs 2,900 crore is backlog which the Captain Amarinder Singh government inherited from the SAD-BJP regime which didn’t make full payment of subsidy in the election year (2017).
“I had taken up matter with the state finance department but they showed inability to clear the subsidy bill. Therefore, to meet day-to-day expenses and clear payments, the PSPCL had no option but to borrow more,” said additional chief secretary (power) Satish Chandra.
“I will take up the matter with the department again to get more payment in lieu of subsidy,” Chandra said.
Interestingly, corporation engineers have already approached the Punjab State Electricity Regulatory Commission (PSERC) against the state government over non-payment of the free power bill. The sector regulator had directed the government to make advance payment for power subsidy. The regulator has fixed the next hearing on the matter next month.
“The power subsidy is not only bleeding the PSPCL but also the state government. This Rs 5,100 crore will be passed on to next financial year and then the total subsidy amount will rise to at least Rs 12,000 crore which the government again will be unable to pay. If the issue is not resolved soon, it is the consumers who will suffer,” said a PSPCL official.
He said by the year-end the total borrowings of the power corporation will be around Rs 30,000 crore.
PSPCL chairman A Venu Parsad said, “Despite doing well in power generation, cost-cutting and electricity sale, the non-payment of subsidy has hit the corporation’s finances hard. We are already using our Rs 600 crore cash credit limit but that is not enough. We will have to resort to more borrowings to clear pending payments.”
They have already requested the government to provide more payment for subsidy, he said.
Padamjit Singh, a former PSPCL engineer who moved the PSERC on the matter, said, “If payments are not made, the power corporation will collapse. I have also approached the central government and the Niti Ayog, as both said power bills should be charged from farmers. Let us charge from farmers and the subsidy can be credited to their accounts.”