Centre’s threat to snap power supply makes states pay up | India News


NEW DELHI: Arrears from central generation companies (gencos) have been reduced to Rs 35,314 crore in August from Rs 49,780 crore a year after the ministry of power It invoked tripartite agreements with the defaulting states and the RBI to recover the outstanding amounts and asked the power plants to cut off the supply to utilities that did not pay their bills on time.
Under the leadership of Raj Kumar Singh, the ministry has invoked agreements with Jharkhand, Karnataka and Tamil nadu to recoup the combined arrears of Rs 30,087 crore, taking a politically non-partisan approach to tackle one of the energy sector’s nightmares.
As of August 31, Jharkhand had an outstanding amount of Rs 3,292 crore. The ministry recovered Rs 714 crore and has reported the recovery of Rs 1,126 crore. Karnataka nightclubs were worth a remarkable 5,240 million rupees. Recall notices have been issued for Rs 1,540 crore. Tamil Nadu had a standout of Rs 21,555 crore.
Tripartite agreements are a security payment mechanism for energy supplied from power plants to the states. It is signed by a state, the ministry, and the RBI. In the event that a breakdown does not pay your bill, it becomes the responsibility of the state. The ministry can then debit the amount from the state account with the RBI.
Under the ministry’s direction, power plants have also issued disconnect notices to J&K, Madhya Pradesh and UP in recent months, where BJP has a lot at stake.
The discoms have 45 days to pay their bill for the energy purchased from the gencos. After this period, the outstanding invoice is designated as the “past due” amount and the gencos charge interest.

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