Government puts in place additional measures to improve financial health of discoms

The central government has put in place additional measures to improve financial health of discoms with streamlining the process of accounting, reporting, billing and payment of subsidy by states to the discoms.

The measures come in the wake of the fact that improper and non-transparent accounting as well as non-payment or delayed payment of subsidy announced by the states is one of the reasons for financial distress of discoms. The Ministry of Power has notified rules on July 26, 2023, which mandate that a quarterly report shall be submitted by the distribution licensee within thirty days from end date of the respective quarter and the state commission shall examine the report, and issue it within thirty days of submission of the quarterly report. The report will inter-alia cover the findings regarding raising of demands for subsidy based on accounts of the energy consumed by the subsidised categories; and the subsidy payable to these categories as announced by state government and the actual payment of subsidy in accordance with section 65 of the Act. Provision has been made that if subsidy accounting and the raising of bills for subsidy is not found in accordance with the Act or rules or regulations issued there under, the state commission shall take appropriate action against those responsible for non-compliance as per provisions of the Act. Further,  it has been prescribed that aggregate technical and commercial loss reduction trajectory would be approved by the state commissions for tariff determination in accordance with the trajectory agreed by the respective state governments and approved by the central government under any national scheme or programme.