New equated monthly instalment scheme introduced by power ministry can help electricity distribution companies (discoms) save a quarter of their additional payouts and clear around Rs 20,000 crore payments to generation firms (gencos) this fiscal, according to Crisil Ratings.
“Electricity distribution companies (discoms) could potentially save a quarter of their additional payouts, and effectively pay Rs 20,000 crore to generation companies (gencos) this fiscal — in addition to their annual cost of power purchase — if they subscribe to the ministry of power’s new scheme,” Crisil said in a statement.
Under this scheme, overdues, including past Late Payment Surcharge (LPS) as on the cut-off date of June 3, 2022, will be converted into Equated Monthly Instalments (EMIs) that discoms have to pay over 12 to 48 months, based on different slabs.
If discoms clear the fresh dues and EMIs on time, going forward, they won’t be billed for LPS by gencos, it
stated.
Success of the scheme will depend on two factors, firstly, how discoms are able to enhance their revenues, and secondly, an enforcement mechanism that ensures timely payment to gencos.
In fiscal 2021, the central government unveiled the Aatmanirbhar Bharat package worth Rs 1.35 lakh crore to clear discom dues.
