Power Ministry notifies new scheme for discoms to pay off dues

28 May 2022 CW Team

For the second time in two years, the Ministry of Power has notified a scheme for the power distribution companies (discoms) to defer their dues towards the power generating companies (gencos).

With the dues of the discoms touching a record high of Rs 1 trillion, the ministry has offered a scheme to liquidate the dues of discoms.

The proposed scheme would allow the discoms to pay their dues in 48 instalments, said the notification by the ministry.

It has also proposed to deliver one-time relaxation to all the discoms wherein the amount outstanding, including principal amount and late payment surcharge (LPSC) on the notification date of the scheme, will be frozen LPSC will not be charged further.

LPSC is imposed on the discoms when they do not pay their monthly dues in 90 days. All discoms' cumulative LPSC stands at Rs 6,839 crore.

The liquidation of outstanding dues in a deferred way without the imposition of LPSC will provide discoms time to shore up their finances. At the same time, gencos will benefit from guaranteed monthly payments which otherwise were not coming to them, the ministry said.

If the discoms delay the instalment payment, LPSC would be imposed on the total outstanding dues.

Under the new scheme, the power ministry claims the discoms will save Rs 19,833 crore on LPSC in the next 12 to 48 months. The savings by discoms will eventually benefit the electricity consumption by lowering the burden of LPSC in the retail tariff. The measure is likely to provide timely liquidation of arrears to the gencos. At the same time, it is being ensured that discoms pay their dues to gencos regularly, otherwise, supply by gencos will be decreased, said the ministry.

Dues of discoms to gencos are on a rise, at a time when the nation battles a coal and power shortage crisis.The dues to central government gencos, mainly NTPC Limited and NHPC Limited, among others, have seen a growth of 25%.

According to the government data, Tamil Nadu is the biggest defaulter, with Rs 20,842 crore dues, followed by Maharashtra, with Rs 18,000 crore dues, and Uttar Pradesh with Rs 9,000 crore dues to gencos.

Image Source

Also read: Govt to launch revamped distribution scheme for power sector

For the second time in two years, the Ministry of Power has notified a scheme for the power distribution companies (discoms) to defer their dues towards the power generating companies (gencos). With the dues of the discoms touching a record high of Rs 1 trillion, the ministry has offered a scheme to liquidate the dues of discoms. The proposed scheme would allow the discoms to pay their dues in 48 instalments, said the notification by the ministry. It has also proposed to deliver one-time relaxation to all the discoms wherein the amount outstanding, including principal amount and late payment surcharge (LPSC) on the notification date of the scheme, will be frozen LPSC will not be charged further. LPSC is imposed on the discoms when they do not pay their monthly dues in 90 days. All discoms' cumulative LPSC stands at Rs 6,839 crore. The liquidation of outstanding dues in a deferred way without the imposition of LPSC will provide discoms time to shore up their finances. At the same time, gencos will benefit from guaranteed monthly payments which otherwise were not coming to them, the ministry said. If the discoms delay the instalment payment, LPSC would be imposed on the total outstanding dues. Under the new scheme, the power ministry claims the discoms will save Rs 19,833 crore on LPSC in the next 12 to 48 months. The savings by discoms will eventually benefit the electricity consumption by lowering the burden of LPSC in the retail tariff. The measure is likely to provide timely liquidation of arrears to the gencos. At the same time, it is being ensured that discoms pay their dues to gencos regularly, otherwise, supply by gencos will be decreased, said the ministry. Dues of discoms to gencos are on a rise, at a time when the nation battles a coal and power shortage crisis.The dues to central government gencos, mainly NTPC Limited and NHPC Limited, among others, have seen a growth of 25%. According to the government data, Tamil Nadu is the biggest defaulter, with Rs 20,842 crore dues, followed by Maharashtra, with Rs 18,000 crore dues, and Uttar Pradesh with Rs 9,000 crore dues to gencos. Image Source Also read: Govt to launch revamped distribution scheme for power sector

Real Estate

07 Jul 2026

Pecan Realty Completes Rs 1.5 Billion Transactions

Pecan Realty has recently completed four institutional transactions worth over Rs 1.5 billion over the past two years, strengthening its position as an execution-led real estate platform. The deals include resolution-led acquisitions, structured finance transactions and capital partnerships across its development portfolio.The transactions covered acquisitions through the National Company Law Tribunal process and helped provide repayment or exits to both private and public sector lenders. The company said the deals demonstrate its ability to resolve complex project situations, work with instit..

Real Estate

07 Jul 2026

SNN Estates Expands North Bengaluru Housing Project

SNN Estates has announced an expansion of its SNN Estates Felicity residential project in North Bengaluru following strong buyer demand, with 75 per cent of the first-phase inventory sold within three days of launch.The developer will add 76 apartments in the new phase, taking the project's estimated revenue potential to around Rs 1,000 crore upon completion of Phase 2.Spread across 6.5 acres in Rachenahalli, near Manyata Tech Park, the project comprises 604 apartments in 1.5, 2, 2.5, 3 and 4 BHK configurations. The development includes a 50,000-sq-ft clubhouse with amenities such as sports co..

Infrastructure Urban

07 Jul 2026

SCG Drives ASEAN Industrial Transformation Strategy

SCG is strengthening its focus on ASEAN as a key growth region by advancing industrial transformation, enhancing competitiveness and building resilient regional value chains. Thammasak Sethaudom, President and Chief Executive Officer, SCG, highlighted the need for industries to continuously develop capabilities, strengthen resilience and deepen regional cooperation to achieve sustainable long-term growth.SCG views ASEAN as an important growth engine alongside China, supported by favourable demographics, trade connectivity and investment flows. With ASEAN’s GDP projected to grow by around 4.7..