Power subsidies should be on states' balance sheets: Jyotiraditya Scindia

NEW DELHI: In a strong message to states, Union Power Minister Jyotiraditya Scindia today said they should take the liability of electricity subsidies on their balance sheets instead of burdening the distribution companies.

His comments come against the backdrop of many state-run electricity distribution companies (discoms) grappling with precarious financial health.

"We ( Power Ministry) do not have any problem if you (states) are giving (electricity) subsidy to any category of consumers.

"However, do not put that liability on the balance sheet of power distribution companies (discoms). It should be funded by you (states) on your sovereign balance sheets," Scindia said here.

The central government is working on a financial restructuring package for discoms and the plan include converting part of the discom's debt burden into bonds by respective state governments.

The liabilities of discoms are estimated to be more than Rs 2 lakh crore.

Four states- Tamil Nadu, UP, Haryana and Rajasthan- have completed the financial restructuring of their discoms.

Scindia also urged the power utilities to restrain from stopping electricity supply to consumers even when electricity is available at reasonable costs from other sources.

"We must move away from such abhorrent practices that leave vast number of consumers in energy poverty," he noted.

In recent times, many states have faced long hours of load shedding even while electricity was available from other sources.

The Minister was speaking at the conference on '10 Years of the Electricity Act 2003 - A Critical Review' organised by industry body Ficci.