Centre fines Telangana Rs 25,000-Cr for not fixing agri-meters, gives Rs 66,413-Cr to 12 States in one year

HYDERABAD: In an effort to impose power sector reforms that include fixing meters to agricultural pump sets, the Centre has fined Telangana Rs 25,000 crore for not complying with the reforms.

The revelation came from Union Finance Minister Nirmala Sitharaman on Tuesday. She made it clear that the Centre was not allowing any enhanced borrowings by Telangana under the Fiscal Responsibility and Budget Management (FRBM) norms as those were linked to the power sector reforms.

Chief Minister K Chandrashekar Rao refused to implement these power reforms arguing that they would impose a financial burden on the farming community which is recovering from decades-long neglect under the rule of erstwhile Andhra Pradesh.

As per the Ministry of Finance, the Centre provides financial incentives to States to accelerate power sector reforms. Twelve States received Rs. 66,413 crore in incentives for adopting the reforms in the power sector. Not only that the Centre also has kept Rs. 1,43,332 crore incentive available in 2023-24 for power sector reforms

“The Department of Expenditure, Ministry of Finance, has given a boost to reforms by the States in the power sector by providing financial incentives in the form of additional borrowing permissions. This move aims to encourage and support the States in undertaking reforms to enhance the efficiency and performance of the power sector,” a statement by the Finance Ministry on Wednesday said.

Based on the recommendations of the Ministry of Power, the Ministry of Finance has granted permission for reforms undertaken in 2021-22 and 2022-23 to 12 State Governments. Over the last two financial years, they have been allowed to raise financial resources of Rs. 66,413 crore through additional borrowing permissions.

Andhra Pradesh topped the list with allowed additional borrowings of Rs 9,594 crore, Assam Rs 4.359 crore, Himachal Pradesh Rs 251 crore, Kerala Rs 8,323, Manipur Rs 180 crore, Meghalaya Rs 192 crore, Odisha Rs 2,725 crore, Rajasthan Rs 11,308 crore, Sikkim Rs 361 crore, Tamilnadu Rs 7,054, Uttar Pradesh Rs 6,823 crore and West Bengal Rs 15,263 crore.

To be eligible for the incentives, State Governments must undertake a set of mandatory reforms and meet stipulated performance benchmarks. The required reforms include:

• Reduction in cross-subsidies.

• Percentage of metered electricity consumption against total energy consumption, including agricultural connections.

• Subsidy payment by Direct Benefit Transfer (DBT) to consumers.

• Progressive assumption of responsibility for losses of public sector power distribution companies (DISCOMs) by the State Government.

• Transparency in the reporting of financial affairs of the power sector including payment of subsidies and recording of liabilities of Governments to DISCOMs and of DISCOMs to others.

• Timely rendition of financial and energy accounts and timely audit.

• Achievement of targets for reduction in Aggregate Technical and Commercial (AT&C) loss.

• Meeting the target of reduction in the Average Cost of Supply and Average Realizable Revenue (ACS-ARR) gap.

• Payment of Electricity bills by Government Departments and local bodies.

• Installation of prepaid meters in government office.

• Use of innovations and innovative technologies.

• Furthermore, States are eligible for bonus marks for the privatisation of power distribution companies

Condemning the Centre's attitude towards Telangana, Finance Minister T Harish Rao has said in Siddipet on Wednesday that the State has been singled out by the BJP-led Centre for helping farmers to recover. “

"While 12 States have allowed the fixing of meters to agriculture connections, only KCR stood firmly behind the farmers in the whole country. Rajasthan, HP, and Karnataka States ruled by the Congress are implementing the Centre’s dictums on power reforms,” he said

Harish Rao cautioned people that if voted to power in Telangana Congress would implement the reforms in the State seriously affecting 64 lakh farmers. “Already Karnataka Deputy CM Siva Kumar said that their States is giving only five hours of power to the farming sector, exposing their nefarious plan for Telangana,” Harish Rao said