Maharashtra energy minister Nitin Raut.
Maharashtra energy minister Nitin Raut.
File photo

Amid rising arrears towards electricity bills, mounting loan and liability of the state power utilities and constraints in the mobilization of additional resources, the Maharashtra Energy Minister Nitin Raut will make a presentation to the state cabinet on Wednesday. This is crucial as the state government has faced wrath from the consumers and opposition for backtracking from its promise to provide relief in inflated bills received during the lockdown citing poor finances and lack of consensus between the finance and energy departments.

The state-run MahaVitaran’s arrears have mounted to over Rs 60,000 crore while the liability of more than Rs 77,180 crore comprising Rs 45,885 crore of loan, carrying cost of Rs 20,905 crore and liability of R 11,020 crore.

The monthly revenue realisation has been reduced to Rs 3,100 crore from Rs4,500 crore following the coronavirus crisis and slowdown. MahaVitaran has a consumer base of 2.73 crore and of the total Rs 60,000 crore arrears it has yet to recover as high as Rs 45,000 crore from agriculture consumers.

The state cabinet has recently announced a scheme whereby the delayed interest payment worth Rs 15,000 crore has been waived while the government will bear additional Rs 15,000 crore. The government has given a total relief of Rs 30,000 crore as the agriculture consumers will now have to clear only Rs 15,000 crore. Deputy Chief Minister Ajit Pawar announced that the MahaVitaran will spend the money recovered from these arrears on capital expenditure especially for the installation of substations, transformers, and laying transmission lines in the respective districts.

Raut had sought a special grant of Rs 10,000 crore from the Centre to meet the MahaVitaran’s cash crunch. But the Centre has refused the government’s plea. The MahaVitaran, the MahaGenco, and the MahaTransco will have to raise additional loans from the state-run Power Finance Corporation and Rural Electrification Corporation with the state government guarantee.

Raut is expected to demand higher allocation in the annual budget for 2021-22 especially on strengthening the transmission and distribution network in order to avoid grid collapse as happened in October last year. He has already announced that the energy department will spend Rs 2,500 crore annually for the next five years for the infrastructure development of MahaVitaran.

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