Andhra budget: 57 per cent of energy allocation meant for free power

VIJAYAWADA: Stating that more than 75 per cent of expenditure in power sector is due to power purchase costs, Finance Minister Buggana Rajendranath Reddy said that the government was reviewing all high cost power purchases. 

For 2020-21, the government has announced budget estimates of Rs 6,984.73 crore, of which over 57 percent has been earmarked for works under the ‘YSR 9-hour free power supply’ initiative alone. The current fiscal’s outlay for the energy sector is 3.11 per cent of the total budget estimates of Rs 2.24 lakh crore and is 1.8 percent higher than the previous fiscal’s budget estimates. 

However, the 2019-20 revised estimates at Rs 11,686 crore were significantly higher than the budget estimate of Rs 6,861 crore. Of the entire outlay this year, Rs 4,000 crore has been proposed for the ‘9-hour free power to agriculture’ initiative alone by installing 8,000 MW to 10,000 MW of dedicated solar power capacity. 

Finance Minister Buggana Rajendranath Reddy stated that despite the severe financial crunch, the government stabilised the power sector by releasing more than Rs 13,000 crore during 2019-20, which surpassed the cumulative releases in the previous five years.

“The government is committed to providing low cost and quality 24x7 power supply to all consumers. The government inherited a power sector which, contrary to popular perception, was in severe financial distress. There were about Rs 20,000 crore of outstanding power purchase dues, Rs 29,147 crore of discom losses and Rs 15,500 crore of government dues to be paid to discoms... More than 75 per cent of expenditure in power sector is due to power purchase cost. The government is therefore reviewing all high cost power purchases,” he observed.  

Further, the Finance Minister added that energy security of the successor State of Andhra Pradesh, post bifurcation, was compromised due to loss of our own coal mines and hydel generation capacity.