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Total outstanding dues owed by electricity distribution companies (discoms) to power producers increased by 17.3 per cent year-on-year to Rs 1,23,244 crore in April 2022. According to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators), discoms owed a total of Rs 1,05,029 crore to power generation firms in April 2021. On a sequential basis too, total dues in April 2022 increased from Rs 1,17,390 crore in March 2022.

In April 2022, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 1,04,885 crore as against Rs 84,376 crore in the same month a year ago. The overdue amount stood at Rs 1,03,331 crore in March 2022. Power producers give 45 days to discoms to pay bills for electricity supply. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.

To give relief to power generation companies (gencos), the Centre enforced a payment security mechanism from August 1, 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply. The Centre had also given some breather to discoms for paying dues to gencos in view of the COVID-19-induced lockdown. The government had also waived penal charges for the late payment of dues.