The power sector will be plunged into crisis following the indifference of the state governments

- Given the complex conditions, the new reform scheme for discoms is likely to remain on paper only.

According to a recent report, some state government departments in various states owe Rs 2,000 crore to government-owned power distribution companies (DISCOMs). Not only that, the state governments are also owed an additional Rs 205 crore by DISCOMs as electricity subsidy, the report said. While state government discoms are gearing up to benefit from a new Rs 4 trillion reform scheme, the negligence of some states may prevent their discoms from becoming eligible for the scheme. Thus, it is clear from this that the state governments have been responsible for the poor financial condition of the discoms of various states for a long time. Some state governments subsidize electricity rates to certain classes of people. The discoms have to supply electricity to this class at the rate fixed by the government, and the state government later pays the money to the discoms. These payments are misappropriated by the state governments.

According to the data, the Haryana government owes Rs 4,150 crore to Discoms. The Rajasthan government has to pay Rs 1,212 crore as subsidy. To be eligible for the new Discoms Reforms Scheme, state governments will have to pay the remaining amount to Discoms first. To be eligible, the state government will also have to pay a subsidy and install prepaid meters in its state government offices. Apart from the state government, DISCOMs will also have to pay the arrears to the power generating companies and disclose them every three months and annually. Only those discoms that comply with government norms will be released under the government's new scheme. Earlier, several schemes were announced to improve the financial condition of Discoms but they did not meet with expected success.

The country's overall power sector has been in a weak position for the past few years due to delays in disbursements of money to discoms and bills from discoms to power producers. In the dialogue with the government, the states support the Centre's efforts to strengthen the power sector and also show their commitment to reduce the losses of DISCOMs. The states were given till October 31 to submit their plans for the new scheme announced in the current financial year's budget, but this date has been extended to December 31. Reducing the loss of discoms is a condition for the states to avail the benefits of the new Rs 3 trillion reform scheme. The Center may have extended the date to give time to the states to comply with this condition. The success of the new reform schemes depends on how much the states can comply with the conditions laid down by the Center.

The arrears of Rs 300 crore due to urban government bodies and other departments of the state government to FISCOMs in FY17 had gone up to Rs 218 crore by September 2017. By June this year, the figure had risen to Rs 2,000 crore. This increase is due to Corona or it is difficult to find an answer for other reasons. Whatever the reason, it is certain that the states will not get the benefit of the new reform scheme unless the conditions of the Center are met.