Under the Aatam Nirbhar Bharat announcements, Finance Minister Nirmala Sitharaman on May 16 announced the privatisation of distribution companies (discoms) in the Union Territories (UTs). CNBC-TV18 has learnt that the power ministry is looking at January 2021 as the deadline for this and some other states have also shown interest regarding the same.

Discoms’ losses on account of power supply termed as aggregate technical and commercial (AT&C) were at 22.1 percent in FY19 and as per provisional data, it stands close to 19.19 percent in FY20.

People in the know have told CNBC-TV18 that some states like Uttar Pradesh, Madhya Pradesh, Assam, Jharkhand, Karnataka, Goa, Haryana, and Gujarat have too shown interest in privatising their loss-making discoms.

Provisional Data/Unaudited data for FY20 reflects Q4 data only for 2 states. Source: UDAY portal

The power ministry is also looking at encouraging Public Sector Undertakings for the discom business in a Joint Venture (JV) with private companies. In the month of May, NTPC a PSU under the ministry had shown interest in acquiring BSES led discoms in Delhi. The idea is also to aggressively push for franchisee models where a private company can help a particular discom to bridge the gap in revenue collection inefficiencies.

Delay in subsidy release, overdue on payments from state government departments, inefficient recovery of revenue, and delay and influence in tariff implementation are key reasons for discoms' losses.

First Published:Jun 9, 2020 2:29 PM IST