Power tariffs likely to go up as Centre readies Rs 70,000 crore financial package

New Delhi, Apr 21: Amidst the plunging cash inflows and drop in collection of bills, the Centre is working out a financial package for the power sector.

There has been a sharp fall in the demand for power amidst the lockdown. Industrial units have remained shut, thus bringing down the power demand sharply. The power consumption has dropped to 125 gigawatts when compared to the 165-168 gigawatts in April 2019.

The collections too have dropped immensely. From an average Rs 55,000 crore that is collected by a discom in around 40 days, the collection has dropped to Rs 12,000 crore.

With the situation being grim, the Centre would work out a Rs 70,000 crore financial package for the power sector. A Cabinet approval is expected soon.

The package would also likely to offer a moratorium and restructuring of debt repayment by power companies, spread across an 8 year period, an official said.

There is also a possibility that the tariff structure could be revised to allow power companies to charge higher rates from consumers. This would however come into effect only once economic activities normalise and companies scale up operations.