States to save Rs 19,833 crore in power dues from Centre’s amnesty scheme – Times of India

NEW DELHI: State discoms ( power distribution companies) will save Rs 19,833 crore on late charge within the subsequent 12 to 48 months from an surcharge-free instalment scheme being rolled out by the power ministry to assist them clear their gathered dues to gencos (era corporations), a serious drag on the sector.
The financial savings from the scheme, first reported by TOI on Could 18, will result in diminished tariff burden for shoppers as will probably be handed on. The scheme is a one-time supply, the ability ministry stated on Wednesday.
The dimensions of financial savings could be gauged from the truth that Maharashtra and Tamil Nadu, which have very giant outstandings towards gencos, will save Rs 4,500 crore every in surcharge cost. Others similar to Andhra Pradesh, Jammu & Kashmir, Rajasthan and Telangana are estimated to save lots of between Rs 1,100 crore and Rs 1,700 crore.
Late charge, referred to as late cost surcharge in business parlance, is charged by gencos on the excellent quantity of a discom. It’s levied on the base charge, pegged to SBI’s Marginal Value of Lending Fee (MCLR).
The surcharge is charged at base charge for the interval of delay within the first month and raised by 0.5% for each successive month of delay, topic to a most of three% over base charge at any time.
Delayed funds, thus, find yourself elevating the burden on discoms and stretch the funds of gencos, impairing their capacity to keep up gas inventories to satisfy increased demand. As of Could 18, the mixed dues of discoms, excluding disputed quantities and surcharge, stood at greater than Rs 1 lakh crore. Surcharge dues stood at Rs 6,839 crore, knowledge accessible on the ministry’s portal on discoms dues present.
Underneath the scheme, the excellent quantity, together with principal and surcharge, can be frozen with out imposition of surcharge on the date the scheme is notified. The discoms can then select a tenure of 12 and 48 months for the instalments. Discoms must clear their present payments on time and preserve funds updated.

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