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Business News/ Market / Mark-to-market/  Losses continue at state power utilities
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Losses continue at state power utilities

State power utilities continue to bleed with aggregate losses of these firms exceeding `1 trillion for a second straight year in 2012-13

Naveen Kumar Saini/MintPremium
Naveen Kumar Saini/Mint

State power utilities continue to bleed. Aggregate losses of these firms exceeded 1 trillion for a second straight year in 2012-13. Accumulated losses at the end of March 2013 hovered around 2.9 trillion and these firms together had a negative net worth of 81,369 crore. A decade after Parliament passed the Electricity Act in 2003, things haven’t changed much. Only 1 in every 6 states shows a profit in its power utility sector. Yes, the realization of distribution companies has gone up; several states are actively seeking annual tariff increases. But these haven’t kept pace with the cost of supply because of meagre tariff hikes, power theft, inefficiencies etc. The gap between the average realization and cost had inched up to 1.25 per unit in 2012-13 compared with 95 paise two years earlier. Even if subsidy is accounted for, the revenue gap only narrowed to 81 paise. These losses will continue unless the problems of transmission and distribution losses and adequate tariff increases are sorted out. That requires political will.

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Published: 17 Feb 2015, 01:04 AM IST
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