TS: Electricity Charges may Rise as Power Sector in Trouble

TS: Electricity Charges may Rise as Power Sector in Trouble

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Hyderabad:  “Before killing a dog, called it mad” is the popular proverb being used to disseminate any setup, the same is being said that the Power Sector in the State of Telangana in financial trouble and its alternative is to allow for an increase in electricity charges.

The Power distribution companies (DISCOMs) claim that they are responsible for paying the monthly interest on the loans and paying the salaries of the employees.  They are seeking financial assistance of Rs. 1,200 per month, otherwise the maintenance of the Discoms will not be possible.  However, the State government, which is already paying large-scale electricity subsidies, has made it clear that it is unable to provide further funding.  It is understood that the alternative is to allow the Discoms for an increase in electricity charges.

The debts and losses are increasing significantly over the years, The Power Sector companies had to buy electricity at a higher price to meet the demand and supply it at a lower rate.  In addition, the non-increase in electricity charges for six years and the huge increase in the salaries of the employees also put a financial burden on the Discoms.  There are estimates that the amount of subsidy received from the government is less than the subsidised electricity supplied under various categories, as a result, losses and debts increased.

It may be recalled that the State government is releasing Rs. 833.33 crore per month on discoms for free electricity to agriculture, other subsidy schemes and upliftment schemes.  For this Rs. 10,000 crore has been allocated in the budget; 2021-22.  Officials say that giving the Discoms at the rate of another Rs. 1,200 crore per month would incur an additional burden of Rs. 14,400 crore per annum.  

It may also be recalled that Chief Minister K.Chandrasekhar Rao has conducted the review meeting with the Telangana TRANSCO and GENCO CMD Prabhakar Rao and explained the condition of the Discoms, They have asked the government to release Rs. 1,200 crore, including Rs. 800 crore per month for interest payment on Discoms debts and Rs. 400 crore for salaries.  However, the government sources said that the Chief Minister had only responded positively to the hike in electricity charges, adding that additional funding was not possible.