UPDATE ON AUG 20, 11:59 AM IST
Pointing to the year-on-year losses of power companies and falling earnings relative to investments, the CAG has said that this is an indicator of their potential financial illness.
The Comptroller and Auditor General of India (CAG) has raised questions on the functioning of government-controlled power companies in the state. Pointing to the year-on-year losses of power companies and falling earnings relative to investments, the CAG has said that this is an indicator of their potential financial illness. He also said that the need to improve the quality of accounts in power companies has also been emphasized.
The plight of the power companies has been revealed in the CAG report placed in the Legislature on Thursday for the year ended March 31, 2019. According to the report, the total investment in 11 power sector undertakings in the state as on March 31, 2019 was Rs 1,97,352.73 crore. Capital in investment was 59.75 percent and long-term debt was 40.25 percent. Power companies suffered a loss of Rs 14,398.96 crore in 2018-19.
According to the report, the present value of funds invested in 11 power sector undertakings as on March 31, 2019, works out to Rs 3,53,573.44 crore. In the period between 2000-2001 and 2018-19, the total income of these undertakings remained negative, indicating that instead of raising revenue from the money invested, these undertakings could not even recover the cost of the government's money. During 2018-19, the power companies had to earn at least Rs 21,579.60 crore on state government investment, but suffered a loss of Rs 14,398.96 crore.
Companies could not achieve line loss reduction target According to the CAG report, the power companies could not achieve the targets set for reforms under the Ujjwal Discom Assurance Yojana (UDAY). Under the provisions of UDAY, the state government had taken over a total loan of Rs 39,133.76 crore during 2015-16 and 2016-17 by providing capital of Rs 9,783.44 crore, grant of 19,566.88 crore and loan of 9,783.44 crore.
Apart from this, the state government also gave subsidy of Rs.669 crore in 2017-18 (5 per cent of loss in 2016-17) and Rs.1417 crore in 2018-19 (10 per cent of loss in 2017-18). According to the report, the performance of power companies in metering on distribution transformers, separating feeders, giving new connections, smart metering and average cost of supply and average revenue collection was not satisfactory.The technical and commercial line losses of power companies were targeted to be brought down to 14.86 per cent by 2019-20 which was 30.30 per cent. Power companies could not achieve the most important goal of reduction in line losses.