Outstanding legacy dues of power distribution utilities or discoms reduced to ₹3,300 crore in March this year from ₹1.39 lakh crore in June 2022, Parliament was informed on Thursday.
Government of India notified the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 on June 3, 2022.
As per the rules, all dues owed to generating companies (IPPs, CPSEs, and Renewable Energy Developers), traders, and TRANSCOs, including late payment surcharges, accrued up to June 3, 2022, were classified as legacy arrears.
1 April 2026
Get the latest issue of Outlook Business
These arrears were required to be rescheduled, with distribution licensees paying them in Equated Monthly Installments (EMIs), stated Minister of State for Power Shripad Naik in a written reply to the Lok Sabha.
The rules also provide a framework for the time-bound clearance of current dues.
As a result, the outstanding legacy dues have reduced from ₹1,39,947 crore as on June 3, 2022 to ₹3,330 crore on March 27, 2026, the minister stated.
Distribution utilities, or discoms, are also paying their current dues in time to avoid regulation under the rules.
For implementation of the rules, PRAAPTI (Payment Ratification and Analysis in Power Procurement) portal was used.
As per the portal, the current dues of discoms are ₹13,594 crore and total dues, which include legacy dues are ₹16,894 crore as on March 27, 2026.
He also told the House that Ujwal DISCOM Assurance Yojana (UDAY) was launched by Government of India in November 2015 with the overall aim of operational and financial turnaround of distribution utilities through financial restructuring.
As many as 27 states (except Odisha and West Bengal) and 5 UTs (except Delhi and Chandigarh) signed MoUs under UDAY.
Major reasons for delay in payments by distribution utilities are, regulatory disallowance of expenses incurred by distribution utilities; continued gap between Average Cost of Supply and Average Revenue Realised (ACS-ARR Gap) and delayed receipt of subsidy and Government department dues from state governments.
He also told the House that Revamped Distribution Sector Scheme (RDSS) was launched in 2021 wherein works amounting to ₹2.83 lakh crore have been sanctioned across the country for loss reduction and smart metering works.
The release of funds for loss reduction works under the scheme is contingent on improvement in operational and financial performance of utilities.
This conditionality has helped in bringing financial discipline in DISCOMs. Further, execution of above works would help reduce technical and commercial losses of the utilities.
