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Distribution companies (DISCOMs) owed renewable generators ₹200.37 billion (~$2.55 billion) in overdue payments (excluding disputed amounts) at the end of June, according to the data released by the Ministry of Power.
The figure marked a decrease of nearly 2% compared to ₹204.39 billion (~$2.60 billion) at the end of May 2022.
Overdue amounts are payments that are past their due date (between 45-60 days) and remain partially or entirely unpaid.
As per the data released by the Ministry of Power’s payment ratification and analysis portal PRAAPTI, the outstanding amount to renewable generators at the end of the month increased by 18% to ₹10.61 billion (~$134.37 million). At the end of May, the amount was ₹8.97 billion (~$113.59 million).
At the end of the month, DISCOMs owed power generators ₹1.12 trillion (~$14.23 billion), increasing 6.5% from ₹1.05 trillion (~$13.36 billion) at the end of May.
At the end of June, the outstanding amount stood at ₹204.64 billion (~$2.60 billion), 9% less than the ₹224.93 billion (~$2.86 billion) in May.
The DISCOMs released ₹134.26 billion (~$1.71 billion) against the overdue amount in June, a decrease of 26.6% compared to ₹183.03 billion (~$2.33 billion) in May.
They also released ₹57.58 billion (~$729.21 million) against the outstanding amount, down by 14% compared to ₹66.71 billion (~$844.84 million) in May.
At the end of June, the renewable energy generators that DISCOMs owed the most were Adani Green Energy, ACME Solar, and Tata Power Company.
Among the states, Maharashtra had the highest backlog with an overdue amount of ₹225.52 billion (~$2.86 billion), followed by Tamil Nadu and Telangana, with ₹218.97 billion (~$2.77 billion) and ₹172.87 billion (~$2.19 billion), respectively.
Regarding ease of doing business, the states at the bottom were Jammu and Kashmir, Telangana, and Meghalaya. Other states that performed badly during the month were Andhra Pradesh, Tamil Nadu, Maharashtra, and Jharkhand. The states that did well in June were Gujarat, Harayana, Himachal Pradesh, Punjab, Uttarakhand, Chhattisgarh, Bihar, Odisha, Assam, Arunachal Pradesh, and Nagaland.
Recently, the Ministry of Power notified the ‘Late Payment Surcharge and Related Matters Rules, 2022.’ According to the rules, a late payment surcharge will be payable on the outstanding amount after the due date at the base rate of the late payment surcharge applicable for the first month of default. The rate of late payment surcharge for the successive months of default will increase by 0.5% for every month of delay, provided that the late payment surcharge will not be more than 3% higher than the base rate at any time.
Earlier, the Ministry of Power had announced that it was working on a program to mitigate the financial woes of the DISCOMs by liquidating their dues. The proposed program enables payment of the financial dues in easy installments by the DISCOMs.
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Rakesh Ranjan is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.