MSEDCL arrears up 35%; finances grim, banks stop lending

Nagpur: State-run discom MSEDCL's condition has gone from bad to worse with dues owed by consumers rising by over 35% in last 18 months. Farmers are the biggest culprits with 75% dues owed by them. The other problem consumers are public water works and street light schemes run by municipal bodies and gram panchayats.

A source in MSEDCL told TOI that MSEDCL's dues were around Rs 26,000 crore in March 2016, which had increased to Rs 36,000 crore in September 2017. "The arrears were Rs 15,000 crore in 2013. Now the company does not have money for buying transformer oil, operation and maintenance (O&M) works and other regular expenses. Banks used to give us overdraft but they have not been providing money due to the worsening financial condition. Recovering arrears from farmers is now the only option," he said.

Even as MSEDCL goes further into the red, the default by farmers is increasing each year. "In 2014-15 the total amount of bills issued to farmers was Rs 2,475 crore. Against this, recovery was only Rs 928 crore. In 2015-16 the recovery vis-a-vis total bill was Rs 365 crore and Rs 2,348 crore. In 2016-17 the figures were Rs 422 crore and Rs 3,045 crore. The collection efficiency for farmers has gone down from 37.5% to 13.86% in just two years," the source said.

"MSEDCL had started several schemes for farmers to pay part of the dues while rest will be waived off - Krishi Sanjivani, Navprakash and Amnesty Schemes - but the response was very poor. The farmers simply don't want to pay power bills," he added.

MSEDCL officials are tight lipped about this issue. Managing director Sanjeev Kumar asked TOI to talk to director (operations) Abhijit Deshpande, who too refused to comment.

Another senior MSEDCL officer admitted the situation was grim. "Politicians don't let us collect dues from farmers, public water works and street light schemes. When we disconnect the defaulters, they pressure the government and force us to reconnect. They fail to understand the company's working will come to a halt if dues are not recovered. The discom has, however, started disconnecting farmers, water works, and other sensitive consumers," he said.

The state has 42 lakh farm pump connections out of two crore in the entire country. Since last six to seven years, the connections have increased by one lakh per year. While this has benefitted the farmers, it has increased financial woes of MSEDCL.