Amid government efforts to stabilize the economy, electricity distribution companies (DISCOs) continue to be a major source of financial hemorrhaging, contributing over Rs600 billion annually to circular debt. The circular debt has now surged to Rs2.467 trillion, underscoring the government’s inability to curtail losses stemming from poor recovery and electricity theft.
Monthly Burden Despite Recovery Claims
DISCOs are adding Rs50 billion every month to the circular debt despite recovery rates reportedly exceeding 92.44%. However, insiders reveal that 10-15% of these recoveries come from overbilling consumers, an unethical practice aimed at artificially inflating recovery figures.
Mounting Receivables Highlight Recovery Failures
The inability to recover dues from both private and public sector consumers remains a glaring inefficiency. As of now:
- Receivables have surged by 69.64%, reaching Rs2.017 trillion, compared to Rs1.189 trillion in 2021.
- Receivables for 2023 stood at Rs1.727 trillion, which is 16.79% higher than the previous year.
Defaulters Include Influential Figures
Notably, running defaulters, including prominent political and industrial figures, owe DISCOs a staggering Rs1.094 trillion, exacerbating the financial strain.
This recurring inefficiency not only worsens the circular debt crisis but also undermines public trust in the power sector’s governance. Urgent reforms, including stricter enforcement of recoveries and transparency in billing practices, are essential to avert further economic fallout.
