Presenting separate power budget, J&K minister says deficit Rs 3,927 cr

SRINAGAR: Presenting a separate power Budget for the second successive time in the Jamme and Kashmir Legislative Assembly for the year 2016-17 Minister for Finance Haseeb Drabu said the power deficit has reached Rs 3,927 crore.
If the power sector finances are taken care of, the state will not have a budgetary gap of Rs 2,988 crore and instead it will be a surplus, Dr Drabu announced in the House, when opposition had walked out.
He said,”if there is complete consensus across political parties, government and civil society on any issue, it is the power sector which can turn around the fortunes of the government finances, put the state economy on a high and sustainable growth trajectory and make life easier for the people.”
Dr Drabu said not surprisingly it has been the stated priority of all successive governments, yet sadly, the power sector continues to be unexploded in term of generations, archaic in terms of transmission and inefficient in terms of distribution.” The economic costs of this are very high and the financial burden is crippling the state and impairing its capacity to spend for the welfare of people, he added.
The Finance Minister said the biggest regret will be that we have not been able to tap the resources for the benefit of our people, adding this is the simple but stark fact.
He said there was unfunded gap of Rs 2988 crore when the power deficit in financial terms is Rs 3927 crore . However, he said, in other word if the power sector finances are taken care of, the state will not have the budgetary gap and instead it will be a surplus.
The minister said despite incurring such losses, the government was not able to provide adequate quantity and appropriate quality of power to our people.
As of now, the state’s peak demand for power has grown by over 8 per cent during the period from 2011 to 2015, he said adding the peak deficit has decreased from 28 per cent in financial year 2012-13 to 23 per cent in financial year 2015-16.
He said the state is energy deficient and has to rely on power purchases from Northern Region Grid to meet its requirements, especially during winters when demand peaks and own generation reduced drastically with the result there remains a large gap between requirement and availability of energy.
Dr Drabu said as per estimates, the total restricted energy availability of power for the year 2014-15 to be 13701 MUs against the unrestricted energy requirement of about 18000 MUs.
Dr Drabu said as on date, total number of 107 villages and 3.56 lakh households are un-electrified which are planned to be completely electrified by the end of 2018-19. He said the government has finalised the Power For All (PFA) roadmap document in consultation with the ministry of power and its agencies.
He announced that government will continue to support the power sector through targeted capital subsidy schemes aimed at supporting the poor and marginal consumers and elimination of regional disparities in the state.
He said a Memorandum of Understanding (MoU) will be signed soon with the Union Government for PFA in the state. About power purchase and revenue realisation, he said there has been definitely a gradual increase in recovery since 1996-97 from Rs 54.33 crore to Rs 1937.27 crore now.
However, he said this has not matched the increase in the cost of power purchase. The minister said the total power purchase liability on this account ended March 2016 was about Rs 7,000 crore.
The surcharge burden of about Rs 1,260 crore get annum with an average interest burden of about 18 per cent. “In my last budget I had announced debt restructuring by raising market borrowing for about Rs 7,000 crore in the form of power bonds to clear all out accumulated power liabilities,” he said.
Under the scheme an MOU was signed by Power Development Department (PDD) with the Centre for raising a loan of Rs 3537.55 crore out of which Rs 2,140 crore has been lifted and Rs 1,397.55 crore is to be lifted during the current financial year.
The balance power purchase liability shall be restricted by the state government by issuing Bonds, he said, adding once the entire liability is so restructured, there would be a net saving of Rs 700 crore on account of reduced interest and surcharge burden. (AGENCIES)

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