J&K suffers record Rs 1900 cr worth power losses

Huge mismatch between purchase bill, revenue

Sanjeev Pargal
JAMMU, May 6: Losses on account of purchase and supply of electricity in the State have touched an all time high at about Rs 1900 crore during just ended financial year of 2011-12 and were pegged to cross Rs 2000 crore in the current fiscal year of 2012-13 due to gross mismatch between revenue collection and power purchase.
Official figures worked out by the State Government revealed that the Power Development Department had to purchase electricity worth Rs 3100 crore from different Grids and power stations during 2011-12, which was an all time record. During 2010-11, the State had purchased power worth about Rs 2800 crore.
“As against Rs 3100 crore worth power purchase bill, the State collected Rs 1203 crore only as power revenue. Of Rs 1203 crore worth collections, Rs 1000 crore came as electricity charges and Rs 203 crore as electricity duty’’, official sources told the Excelsior.
This left a deficit of about Rs 1900 crore in power purchase bill and revenue including electricity duty generated from the power supply, sources said, adding that such huge losses on account of power were become “unbearable for the Government’’ especially when there seemed to be no respite from this even during current financial year of 2012-13.
The State Government had fixed a target of Rs 1600 crore revenue generation from electricity for last financial year that ended on March 31. However, the Department fell short of target by Rs 400 crore.
Despite heavy losses on account of electricity, the PDD’s revenue of Rs 1203 crore during last financial year was about Rs 300 crore more than 2010-11 when Rs 900 crore worth revenue was realized. Though there had been improvement in revenue realization, still it fell short of target and well short of the power purchase bill.
For the current financial year, the Government was likely to revise revenue target for the PDD at Rs 1800 crore in view of increase effected in all kind of electricity charges recently.
Sources said last financial year’s power purchase bill had been kept in the initial budgetary estimates at Rs 2600 crore. In the revised budgetary estimates, it was taken to Rs 3000 crore and finally the PDD ended up with purchasing electricity worth Rs 3100 crore as against Rs 1203 crore worth revenue, leading to a deficit of about Rs 1900 crore, which was an all time high.
There appeared to be no respite for the Government on the losses on electricity front even during current financial year, sources said, adding the Government was expecting deficit between power purchase and power revenue bill to cross Rs 2000 crore for the first time during 2012-13.
For 2012-13, the budgetary estimates on account of power purchase bill have been fixed at Rs 3000 crore but the authorities anticipated them to touch around Rs 3300 crore. Though the power revenue has been targeted at Rs 1600 crore, the Government was not expecting it to cross Rs 1300 crore, sources said, adding that this would lead to a deficit of Rs 2000 crore.
It may be mentioned that a high level delegation of the State in its first meeting with the officials of the Planning Commission of India to discuss annual plan for 2012-13 on December 15, 2011 had apprised the Planning Commission that the State’s power revenue was also increasing but a big gap remained between power bill and revenue as it can’t initiate all reforms in one go.
“It was in view of this that the State Government had also batted for annual power reforms grant to the tune of Rs 2000 crore for few years till the State managed to bring reforms and improve its revenue base’’, sources said, adding that the Planning Department assured to give a thought to the State’s demand.
Worthwhile to mention here that J&K Government was given Rs 1300 crore worth annual power reforms grant for three years in 2006-07, 2007-08 and 2008-09 after Congress leader and present Union Minister for Health and Family Welfare Ghulam Nabi Azad had taken over as the Chief Minister on November 2, 2005 for two and a half years. The grant was later stopped as the Government didn’t take significant power reforms then.
The State delegation would again project the demand with the Planning Commission of India during its next round of meeting in New Delhi for annual plan finalisation, sources said.
They added that despite suffering heavy losses on account of power purchase bill, the State won’t be in a position to provided round-the-clock power supply to Jammu during summer and Kashmir during winter including the fully metered areas. The PDD had to go for both scheduled and unscheduled power cuts, they said.