Govt’s Power Purchase Bill Set To Surpass Rs 4000 Crores

Govt’s Power Purchase Bill Set To Surpass Rs 4000 Crores

17 March 2013
The Daily Excelsior
Sanjeev Pargal

Jammu: The State Government would be purchasing power worth more than Rs 4000 crores in the next financial year i.e. 2013-14 taking the losses on account of power purchase to nearly Rs 2500 crores notwithstanding a series of measures taken to increase revenue and reduce Transmission and Distribution (T&D) losses. The power purchase bill, which has fast been becoming a serious headache for the Government, was expected to stand around Rs 3900 crore during the current fiscal year of 2012-13 though it was tipped to be Rs 3875 crores in the revised budgetary estimates. Official sources told the Excelsior that despite spending Rs 3875 crores this year on power purchase bill (the amount could touch Rs 3900 crores or a little more), the Government has fixed budgetary provision of Rs 3579 crore for purchasing electricity during 2013-14. The sources, however, admitted that the amount was likely to exceed even though the Government intended to keep it minimum in the next financial year. “If we are spending Rs 3875 crores on purchase of electricity during 2012-13 as against the initial budgetary target of Rs 3100 crores, the next financial year we would definitely surpass the figure of Rs 4000 crore as cost of power purchased from different sources including the Northern Grid was becoming dearer every year’’, sources said. They anticipated that the power purchase bill could even touch Rs 4500 crore but maintained that the Government has issued directions to the authorities at the helm of affairs in the Power Development Department to keep the power purchase bill within the budgetary provision of Rs 3579 crores for the next year. However, they admitted that it wouldn’t be possible for the officials to stay within the prescribed target of power purchase. While on the one hand the power purchase bill kept on rising with the passing of every year, the revenue realization remained a cause of big worry for the Government. As against Rs 2340 crore revenue realization target fixed for the Power Development Department by the State Government, the Department would be realizing only about Rs 1450 crores i.e. about Rs 900 crores less than the target. In the next financial year also, the Government has given the PDD a target of Rs 2541 crore revenue realization. Going by the year wise increase in revenue realization, sources said, the PDD could at best realize Rs 1700 crores. “Even Rs 1700 crore revenue realization would lead to a deficit of Rs 2300 crore between power purchase bill and revenue but the losses would go up to Rs 2800 crores if the purchase bill touched Rs 4500 crores’’, sources said. The Government has directed the PDD to stop electricity supply to all Government Departments and Public Sector Undertakings (PSUs), which didn’t have installed the meters. “From the next financial year, there would be no power supply to any Government Department and PSU, which didn’t have the electronic meters’’, sources said, adding the Government has also directed its all Departments to clear power arrears, which they owed to the PDD from their budgetary resources. A number of Government Departments owed hundreds of crores of rupees to the PDD, sources said, adding if the dues are cleared, the PDD’s revenue realization would improve drastically. Worthwhile to mention here that during Ghulam Nabi Azad regime in Jammu and Kashmir, the Central Government had given Rs 1300 crore per year power reforms grant to the State for three consecutive financial years including 2006-07, 2007-08 and 2008-08 to cut power losses. However, even the power reforms grant had failed to reduce the losses, which kept on increasing mainly due to very less revenue realization as against the power purchase bill.