In fact, UP has also topped the list of the state governments, whose departments owe massive power dues.
At the end of March 2017, while UP government departments owed Rs 88 billion in power dues, second-placed Telangana owed less than half of this amount at Rs 35 billion, followed by Maharashtra at Rs 33 billion. Next in the list are Andhra Pradesh (Rs 28 billion), Kerala (Rs 26 billion), Jammu & Kashmir (Rs 18 billion), Karnataka (Rs 18 billion) and Bihar (Rs 6 billion).
Sharma has also blamed the ‘apathetic’ attitude of the previous dispensations for the lacunae, which he asserted was now being plugged by the Adityanath government. Currently, the energy department has launched an extensive drive against 100,000 top defaulters to reduce the cash gap.
Cash gap refers to the time interval between the date when a company pays cash for the inventory and the date it receives cash from customers for the same inventory. Greater cash gap ultimately adds to the cost of the service provider or seller of goods and/or reduces profit.
UP State Power Consumers Forum president Avadhesh Kumar Verma said if the government departments settle power dues, it would not only improve the financial condition of UPPCL and the power distribution companies (discoms), but provide succour to the consumers as well in lower tariffs.
Under Ujwal Discom Assurance Yojana (UDAY), the Centre has mandated the state governments to substantially cut down on the power dues of their departments and agencies. It is a central scheme of the ruling National Democratic Alliance (NDA) government at the Centre for the financial restructuring of ailing discoms, which had collectively accumulated losses of Rs 3.6 trillion in the country.
In UP, UDAY was projected to accrue total savings of Rs 330 billion to state discoms and enable them raise fresh capital for future investment. After the injection of UDAY, UP discoms are still grappling with high accumulated losses and prospective losses going forward due to steep line losses, lower realisation and rampant power theft.