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Electricity Distribution companies (DISCOMs) are facing enormous losses because of slump in industrial and commercial demand of electricity. The sector is going through bad times and it is going to be tremendously affected by this pandemic and resulting lockdown and social distancing norms. According to CII report, the along with DISCOMs the energy sector will suffer a net revenue loss of Rs 30000 crore and liquidity crunch of Rs 50000 crores amid the situation the country is caught into.
The DISCOM companies are demanding a slew of measures to help them tackle the situation. Discoms are facing the demand slump along with the liquidity crunch simultaneously.
The CII report released has suggested some measures like easy facilitation of credit to power industries which will enable them to pay off their debts, lowering the tariff for industrial and commercial consumers and deferring the indirect taxes. Demand is already under pressure and further lockdown will add onto this pressure leading to additional demand contraction.
There have been reported delays in current projects because of inconvenience caused by lockdown and the sector dependent on the DISCOM Companies and energy sector will even go through hardships. In its latest data released from POSOCO, indicates that the total demand per week between March 23 and April 12 was approximately 18 billion unit (BU), compared to approximately 23 BU during the week of 9-15th March (before Janata Curfew and lockdown), 25-28 per cent reduction in demand, a CII whitepaper titled sustaining India’s Power and Renewable Energy Sector in the Wake of COVID-19 said.
The further extension of the lockdown could result in additional demand compression of approximately 15-20 BU, implying a net revenue loss of ₹ 25,000 to ₹ 30,000 crore for the Discoms. This will further increase the liquidity crunch to nearly ₹ 45,000 to ₹ 50,000 crore, in addition to the ₹ 90,000 crore dues pending by the Discoms to generating companies’ pre-lockdown, CII said.
To revive the growth of discoms , CII said, The central power finance institutions (PFC, REC, and IREDA) to consider lending directly to Discoms or to discount the Discoms’ outstanding dues. Also, offer them repayment moratorium of up to 6 months, followed by monthly repayment over the next 54 months.
Source - ANI