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| PDD bleeds J&K’s public purse yet again | | Department causes losses worth thousands of crores due to non- realization of revenue | | Early Times Report
Jammu, Feb 24: Scrutiny of the official documents of the Power Department has found a loss of more than Rs 1700 crores to the state exchequer due to the non- realization of revenue, plunging the already cash starved public purse in oblivion.
The targets for the collection of tariff were not achieved during 2014-15 to 2018-19 and that during 2018-19, Receipt on account of sale of power was Rs 3,246 crore against the target of Rs 5,042 crore, reveal the official records accessed by Early Times.
The revenue realized from the sale of power was less than the cost of purchase in all the years. The State had set its revenue collection targets lower than the cost of purchase. This less realization of revenue against the cost of power purchase during respective years was a burden on the State. Difference between cost of purchase of power and actual revenue realized from sale of power is on account of operational inefficiencies and slow implementation of power reforms. The State has very high AT&C losses (50 per cent).
During 2018-19, the Department purchased power worth Rs 7,167 crore and against which it paid only Rs 5,265 crore. As of March 2019, the department had a cumulative liability of Rs 8,970 crore on account of unpaid power purchase bills. During 2018-19, the State Government is shown to be in Revenue Deficit by Rs 4,859 crore and Fiscal Deficit by Rs 13,337 crore. After taking into account the deferred liability on account of outstanding power bills amounting to Rs 8,970 crore, the Revenue Deficit and Fiscal Deficit is understated to that extent.
Furthermore, the function of electricity supply to consumers is handled departmentally in the State, as de-bundling and power reforms have not yet been achieved (March 2019). Hence, the receipts and expenditure on procurement and supply of electricity forms part of the State Government accounts. Steadily rising gap between the Revenue Expenditure of the Power Development Department and Revenue Receipts is the most significant structural imbalance in the Budget of the Government and a drain on the resources, which could otherwise be deployed for developmental outlays.
Pertinent to mention here that during 2017-18, the Department purchased power worth Rs 5,709 crore against which it paid only Rs 3,036 crore to the power producers, thus creating liability on account of power purchase. The department had liability of Rs 7,018 crore on account of unpaid power purchase bills. The then State Government was in the year 2018 showing revenue surplus of Rs 7,595 crore but after taking into account the deferred liability on account of outstanding power bills amounting to Rs 7,018 crore, the revenue surplus will be reduced to that extent. It is pertinent to mention that there have been serious crises looming large in the Power Development Department (PDD) due to the non- implementation of the central schemes aimed at reforming power resources in Jammu and Kashmir. With non- realization of revenue, the crises seem to have only been multiplied with each passing day. |
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