In a big decision to improve the financial position of the Jammu and Kashmir Power Development Corporation Limited (JKPDCL), the Finance Department of the Union Territory on Monday directed all government departments to clear all outstanding dues against electricity bills immediately.

This step has been taken by the Finance Department in view of the huge pendency of arrears of electricity by Government Departments in the Union Territory.

Financial Commissioner, Finance Department, Atal Dulloo, who is also additional Chief Secretary of J&K, issued a circular to give directions to all Government Departments to clear dues.

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Governments departments to clear electric bills every month

"It has come to the notice of Finance Department that there are outstanding and pending electricity dues against various Government Departments of Union Territory of J&K", circular reads.

Each department is supposed to clear the electricity bills of their offices raised by the Power Development Department (PDD) every month by way of contra-credit and book adjustment at respective treasuries. 

J&K Government

To streamline payment of electricity dues, it is impressed upon all the administrative secretaries to instruct the heads of the departments and drawing and disbursing officers under their administrative control to clear the electricity dues immediately.

It is further directed to different departments that the properly assessed bills shall be cleared by each department on a monthly basis and a shortfall in budget allocation with proper justification shall be projected in the revised estimates 2021-22.

J&K leads in power losses in India

The Union Territory of J&K has reported the highest losses among Power Distribution Companies (discoms) in India. 15 state power distribution companies (discoms) in Andhra Pradesh, Gujarat, Tamil Nadu, Karnataka, Uttar Pradesh, West Bengal, Manipur, and Madhya Pradesh narrowed their losses by more than 10% in 2019-20. Delhi clocked the lowest loss among discoms.

According to recent reports, J&K recorded Aggregate Technical and Commercial (AT&C) losses of 60.5 percent in the year ended March 2020. The high loss figure of J&K was followed by Nagaland (52.9 percent), Arunachal Pradesh (45.7 percent), Bihar (40.4 percent), and Tripura (37.9 percent).

Power Tariff
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J&K suffers huge power revenue losses

As per reports recently published in a section of media, Jammu and Kashmir has suffered Rs 1,800 crore revenue loss in the past five years. The main cause of this is because PDD has failed to recover power tariffs from major defaulters.

As per official figures, tariff collection was not met during 2014-15 to 2018-19 and that during 2018-19, as target set was Rs 5,042 crore but receipt on account of sale of power was Rs 3,246 crore. The main issue for huge revenue loss in past years is that the sale of power is less than the cost of purchase which obviously turned out to be a headache for the state.

As per reports the department had purchased power of Rs 7,167 crore but paid only Rs 5,265 crore against it. The unpaid power purchase bills created an increasing liability of Rs. 8970 crore on the department in March 2019. The revenue deficit for the state was Rs 4,859 crore during 2018-2019 and the fiscal deficit was Rs 13,337 crore.

Jammu and Kashmir is facing a revenue generation gap of electricity as the PDD has failed to recover power tariff from big defaulters.