Lok Sabha Question No. 801 (UNSTARRED), answered on 2023-12-07
Subject: Subsidy on Electricity
Ministry: POWER
Asked by: Ritesh Pandey

## GOVERNMENT OF INDIA MINISTRY OF POWER LOK SABHA

## UNSTARRED QUESTION NO.801 ANSWERED ON 07.12.2023

## SUBSIDY ON ELECTRICITY

## 801.   SHRI RITESH PANDEY:

Will the Minister of POWER be pleased to state:

- (a) whether  the  Government  is  aware  of  the  increasing  losses  of  DISCOMs which surged to 66 per cent in financial year 2021 despite reform programmes and financial restructuring packages over the last two decades;
- (b) if so, the details thereof and if not, the reasons therefor;
- (c) the quantum of electricity subsidy provided to the consumers along with the  number  of  beneficiaries  and  the  quantum  of  losses  incurred  by  the electricity distribution companies during the last five years;
- (d) whether  the  Government  proposes  to  phase  out  electricity  subsidy  by reducing the cost of power through power dispatch from less-polluting thermal power plants, if so, the details thereof and if not, the reasons therefor; and
- (e) whether  the  Government  also  proposes  to  bring  'one  nation-one  power tariff'  policy  to  ensure  uniform  electricity  rates  across  the  country,  if  so,  the details thereof and if not, the reasons therefor?

## A N S W E R

## THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY

(SHRI R.K. SINGH)

- (a) to (d): The  losses  of  the  DISCOMs  have  reduced  substantially  and  the power  sector  has  become  viable  because  of  a  number  of  steps  taken  by  the Government. These include:
- (i) Putting in place Rules to ensure payment for any subsidy declared by Government in time.
- (ii) Ensure that the tariffs are up to date.
- (iii) Reducing the Late Payment Surcharge.
- (iv) Ensuring that the GENCOs are paid on time.
- (v) Ensuring Energy Accounting and Energy Audit.
- (vi) Putting in place revised prudential norms providing that no DISCOM or  GENCO  of  a  State  Government  will  be  able  to  get  loans  from PFC/REC if the DISCOM is making a loss, unless the DISCOM, with the  approval  of  the  State  Government,  works  out  a  plan  for  loss reduction and files it with the Central Government, and adheres to that loss reduction trajectories.
- (vii) Put in place an incentive of an additional borrowing space of 0.5% of GDP if the DISCOM puts in place loss reduction measures.
- (viii) Provided  for  covered  wire  in  high  loss  areas  under  DDUGJY  and IPDS.
- (ix) Provided that loss making DISCOMs will not be able to draw funds under any Power Sector Scheme of Government of India unless they put in place measures for loss reduction.

As a result of the above, the AT&C losses - which were 21.61% in FY17-18 have come down to 16.42% in FY21-22.

(e) : As  per  the  provisions  of  the  Electricity  Act,  2003,  the  State  Electricity Regulatory  Commission  determines  the  electricity  tariff  for  retail  sale  of electricity to end consumers.  Section 61 of the Electricity Act, 2003 and the Tariff Policy provide the guiding principles for determination of tariff.

At  present  there  is  no  proposal  to  implement  uniform  electricity  pricing throughout  the  country.    However,  Government  is  promoting  competition through Power Exchanges.  Uniform tariff is discovered on the Power Exchange for a specific time block of the day.  Accordingly, to this extent, for the power procured  by  the  distribution  utilities  from  Power  Exchanges  the  price  of electricity remains uniform, except in case of market splitting.

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