Discoms taking longer to clear their dues

State-run power distribution companies (discoms) are holding back payments to electricity generators for as long as one-and-a-half years, information available in the Union power ministry’s ‘Praapti’ portal shows.

Power generators usually raise bills between 5 to 15 days after the end of every month and discoms are supposed to pay them within 30 days or at best 60 days. But while discoms are clearing their bills – they are waiting for as long as they can to do so. In March, for instance, they cleared bills worth Rs 30,438 crore.

Delaying payments to generators help cash-strapped discoms manage their working capital cycles and avoid costly working capital loans. But it is taking a toll on power generators which need to pay for coal in advance and service their debt obligations

“With the second wave of Covid overwhelming the country, timely payments have become critical for us. We need the resources to ensure continuous supply of electricity,” a senior executive at an independent power generator told FE.