Govt fails to prove that discom losses were below Rs 90,000 cr in FY2021

The government is not certain about the losses in distribution, often termed as the most important but weakest link in the power sector value chain. In a press release intended to repudiate media reports saying that the discoms’ losses are in the range of Rs 90,000 crore in FY2021, the Power Ministry failed to assert that the figure is lower.

The release said that “the loss figures of Rs 90,000 crore for FY2021 seem to be grossly inflated” (https://pib.gov.in/PressReleasePage.aspx?PRID=1746899). The headline of the release also said, “Ministry of Power says speculations about discoms achieving loss levels of Rs 90,000 crore in FY2021 seem to be grossly inflated.”

The phrase “seem to be” hint at something that is likely to be in a particular manner, but it also means that it may not be that way. The likelihood is very high but there is no certainty. For instance, when an economist says that the economy seems to be doing well, he highlights the good chance of a good GDP growth rate and buoyancy in other macroeconomic indicators, but he is not sticking his neck out for it.

Another example: If there is a false rumor in the media or on social media that some minister has been sacked, the government would issue a statement saying something like, “Mr. X is still a member of the council of ministers.” It won’t say, “It seems the Mr. X is still a minister.”

The issue here is: Whether or not discoms incurred losses in tune of Rs 90,000 crore in the last fiscal? The government is either unaware of the real position or is unwilling to speak the truth.

For the purpose of a press release is to present an organization’s position on the subject, not to make allusions, to say that something seems to be correct or incorrect. An editorialist can use the expression ‘seem to be,’ not a press release writer, certainly not one writing for the government.

The press release is littered with numbers and sarkari claims. Savor this: “The government of India has been taking significant steps to improve the operational efficiencies and financial viability of discoms. To tide over the liquidity problems of increasing discoms payables to Gencos arising out of the outbreak of Covid-19 lockdowns, the government of India has launched a liquidity infusion scheme under which discoms are already availing benefits under the scheme tied to reforms. The government has also incentivized the discoms to transform, reform and perform by linking 0.5% of the additional borrowings linked to power sector reforms from FY 2022 to FY 2024…”

However, there was little in it to show or prove with clarity that the Rs 90,000-crore figure is erroneous.