The proposed amendment in the Electricity Act 2003 providing subsidy on power to farmers through direct benefit of transfer may not be practically possible, say experts.
In the draft amendment, the power ministry has proposed to initiate direct benefit transfers (DBT) in the power sector by making payment of the subsidy into the accounts of consumers maintained by discoms and not directly into their bank accounts.
"Though the intent is right, there will be operational challenges in its implementation. Whether the proposal is going to be a game changer or not, depends on when the subsidy is released on time," BSES Rajdhani Power CEO Amal Sinha said at a virtual meeting organised by Care Ratings.
Echoing the views, Gujarat Urja Vikas Nigam CFO Shubhadeep Sen said that the DBT introduced in petroleum is completely a different ballgame and may not be practical in the power sector.
"What we see in the petroleum sector, is difficult to be implemented in the power sector. It is a good proposal if it can be done effectively. But since it also involves shelling out a lot of finances, it is practically not possible," he added.
On a query about the finances coming under constraint for discoms, Sinha said that the company has become more watchful on the capex especially after the coronavirus pandemic which has significantly impacted the collections.
"Due to the COVID pandemic induced lockdowns and subsequent slower pace of activities in the unlock phases, there has been a significant impact on commercial and industrial collections as the demand has not revived completely. We are taking steps to reduce our capex for the fiscal and also reducing a lot of operating expenses as well," he said.
Sen also noted that the GUVNL will be reducing its capex but would continue to spend on improving efficiency.
"We had the financial strength and so we had given certain reliefs to the consumers as well as allowed postponement of payments. As much as 85 per cent of our revenues have come back and we are also taking loan for working capital requirements. However, we are being prudent and will invest in improving efficiency, " Sen added.