The government is proposing to build dis-incentives in the form of denying loans and grants for discoms that do not set their house in order and reduce losses.
According to the PRAAPTI portal, the total outstanding of the discoms to gencos as of July this year stood at Rs 73,425 crore, including the overdue amount of Rs 55,276 crore.
Nothing will change unless state electricity boards are revamped
The discoms are also working in tandem with generation and transmission companies to ensure that the entire generation, transmission and distribution system is aligned to meet the summer load.
Dues as on date run into an estimated Rs 60,000 crore, half of it being towards independent power producers in power sector.
The UDAY scheme has come under a cloud as there is stagnation in the improvement of various operational parameters.
A progressive increase of power tariffs was critical to pare down AT&C losses but many states have not raised tariffs, which are hurting discoms
Recently, the Centre had claimed that it had completed the electrification of all villages and 83 percent of all households in the country.
Ind-Ra expects utilities to increase the share of short-term purchases in the next three years gradually.
Delhi government in 2014 had ordered a CAG audit of three power distribution companies - BSES Rajdhani Power Ltd, BSES Yamuna Power Ltd and Tata Power Delhi Distribution Ltd.
ICRA today said it is expecting debt refinancing by state governments under UDAY scheme will lower the losses of discoms from Rs 67,000 crore in FY2015 to Rs 37,500 crore in FY2017.
The continued non-payments by Delhi discoms would make it very difficult for NTPC to keep maintaining its reliable supplies in the ensuing peak summer season where the demand of Delhi is supposed peak to at 6600 MW as per estimates, a source said.
Apex auditor CAG has pointed to outstanding dues of Rs 4,911.07 crore owed to the Delhi government's power generation companies by private discoms, forcing them to resort to heavy short term borrowings.
The power distribution utilities in Rajasthan, Haryana, Chhattisgarh and Punjab are among major gainers in lowering their interest cost under UDAY scheme meant for revival of discoms.
In January 2017, India‘s coal imports declined by 22 percent to 14 million tonnes because of lukewarm demand from power generating stations.
Tamil Nadu will become the 21st state to join UDAY scheme, meant for revival of debt stressed discoms, tomorrow which would help it save around Rs 11,000 crore during the period of turnaround by 2019.
Tamil Nadu will become the 21st state to join UDAY scheme meant for revival of debt stressed discoms on Monday, paving the way for covering almost 90 percent of total utilities' debt of around Rs 4 lakh crore.
The scheme for procurement of wind energy through auction is a positive for the sector but receivables (payment delays by discoms) remain an area of concern, says ICRA.
"EESL plans to distribute LED tube lights of 20 watts to consumers at an upfront cost of Rs 230 per unit," Power Minister Piyush Goyal said in a written reply to the Rajya Sabha.
"Ministry of Power vide letter dated November 22, 2016 has accorded approval for continuation of the Payment Security Mechanism beyond October 31, 2016," NTPC said in a BSE filing.
Indian power distribution firms will require large capex in 2017 which will lead to marginal improvement in their credit metrics, but their ratings may remain stable, says Fitch in its report.
IS JHA, CMD of Power Grid told CNBC-TV18 that the company has already planned funding for its Rs 23,000 capex target.
Industry body Assocham has sought relaxation in the norm that seeks long-term power purchase agreements (PPA) with distribution companies (discoms) to get coal under fuel supply agreement.