Opinion | The case for power discom privatization4 min read . Updated: 05 Aug 2018, 05:32 PM IST
Operational autonomy and the private sector's ability to strategize and plan for the long term are essential in an area like power distribution
Distribution serves the most vital function in India’s power supply chain, yet it is also possibly the weakest link. State discoms continue to make losses despite multiple bailouts. While the government’s Ujjwal Discom Assurance Yojana (UDAY) scheme seeks to reduce discom losses, there is hardly any impact on their financial status. In fact, the combined losses of state-owned power discoms by end FY 2017-18 were ₹ 40,295 crore. Discoms continue to face power theft (published aggregate technical and commercial, or AT&C, losses being nearly 20%), billing inefficiencies and regulatory delays in tariff increases, resulting in financial losses. The accumulated debt of power discoms was ₹ 45,952 crore. The banking sector still faces the possibility of an estimated ₹ 175,000 crore worth of non-performing assets due to the power sector.