Jammu, Jan 11: Jammu and Kashmir Finance Minister Haseeb Drabu today presented the Power Budget with a focus on putting in place a roadmap to address purchase liability and put reform as the core agenda for the sector.
The second power budget, after first presented six months ago, put in place a transparent accounting system for the sector as the government 2016-17 spent Rs 12,000 crore on power purchases and liquidating past liabilities.
Drabu said budgetary provisions have been made for a fully-funded investment plan under the Prime Minister’s Development Plan (PMDP).
“The investments were directed towards making systemic and capacity improvements in the Transmission and Distribution infrastructure in the state, with an aim to supply adequate quality power and make the State Power Development Corporation debt-free with financial restructuring,” he said.”In 2016-17, we have spent Rs 12,000 crore on power purchases and liquidating past liabilities; which have been accumulated on account of serving power, despite this the power power situation on the ground – in winter in Kashmir and in summers in Jammu – hasn’t improved,” he said.
Drabu said till date the government has liquidated more than Rs 4,000 crore of past liability and the balance will be cleared by the end of the financial year.
As stated in the state budget, the power deficit in financial terms is a little more than Rs 2,500 crore after adjusting subsidy element and reasonable T&D losses. “If this deficit is taken care of, we would have no budgetary deficit, he said.”Despite the tariff being one of the lowest in the country, our power collections are consistently one third or one fourth of what is budgeted. It is a fact that a vast majority of users don’t pay electricity bills at all or in line with their consumption,” he said.
“The moot point is, any amount of budgetary support or any amount of additional power infrastructure cannot enable,” he rued.Drabu said last year not much infrastructure could be created due to the turmoil in the Valley.
The minister said three lakh households in the state have no electricity connection. “(But) we have 20 lakh households consuming electricity. The national average for electricity consumption per household is 3 units of electricity per day,” he added.
On this basis, J&K should be buying 3,200 MUs to provide electricity to its 20 lakh households. Instead, the state buys 6,400 MUs for the household segment at an average consumption of 6 units per household after accounting for T&D losses of 30 per cent, he said.
Drabu said this was one of the highest in the country, even when compared to hill states. He said the only solution is investment in transmission and distribution infrastructure.The government would soon launch an ambitious metering and enforcement framework to check power misuse, he said.
“A systemic framework for augmentation of the power infrastructure in the state has been prepared and sanctioned under PMDP and various flagship schemes of the Government of India, and is being rolled out. Once implemented, the government will be able to provide 24×7 quality, reliable and affordable power to all,” he said.
Drabu said the total power purchase liability on this account ending March 2016 was about Rs 8,000 crore and a surcharge burden of about Rs 1,260 crore per annum.
“I am happy to inform that the debt of Rs 3537.55 crore has already been restructured under ‘UDAY’ and the balance Rs 3,500 crore will be restructured through Power Bonds. Such restructuring of the debt will result in twin benefits to the state – there would be net annual saving of about Rs 1,260 crore and we will be able start with a clean slate from April,” he said.
As on March 31, 2016, the JK SPDC has received an amount of Rs 4,300 crores approx as plan funds, in addition to Rs 793 crore given to it for BHEP-I under PMP.Similarly, it has been selling power to the J&K PDD and as on March 31, 2016, there was an outstanding of about Rs 2,400 crore on this account. “I am happy to announce that after adjusting power supply dues, the balance Rs 1,900 crore would be converted into equity, raising the equity contribution of the state government in the J&K SPDC.”
The JK government in 1995 had transferred the ownership of assets/projects of the PDD to SPDC, when the corporation was formed, for a token of Re 1 against their actual value of Rs 916 crore, he said.
“I intend to go for re-valuation of these projects/assets and treat this re-valued amount as additional equity of the Government in the Corporation. This is expected to add additional Rs 1,000 crore to the equity base of the J&KSPDC,” he said