Q.3)Despite several efforts by the Centre to improve the efficiency, Discoms continue to perform dismally requiring frequent financial aids. What are the factors responsible for this? Suggest the way forward. (10 marks)

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Swatantra

“Mentor’s Comments”

https://indianexpress.com/article/opinion/columns/cash-strapped-power-distribution-companies-need-radical-intervention-not-another-financial-aid-package-7365477/
In the intro, mention the liquidity facility for Discoms announced by the Centre in the last Budget.
In the body, mention the various factors such as low tariffs, cross-subsidization, long power purchase agreements, unpaid subsidy bill by the state governments, lack of metering and data etc. In the suggestion mention national power distribution company, debit of dues by the RBI, privatisation, linking of state borrowing to the reforms in Discoms etc.
Conclude by mentioning that Discoms need radical intervention rather than financial packages.

Comments

34 responses to “Q.3)Despite several efforts by the Centre to improve the efficiency, Discoms continue to perform dismally requiring frequent financial aids. What are the factors responsible for this? Suggest the way forward. (10 marks)”

June 21, 2021

shubham yadav

Please review it sir
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1. June 25, 2021
  
  Swatantra
  
  Shubham
  
  Introduction is okay but it will be better if you use current budget data, also you an mention about the UDAY scheme, that was one of the important schemes of the government.
  
  Lot of missing points are there in the content,some are repetitive for example-
  AT&C(aggregate technical and commercial )losses currently stand at 21.7% at the all-India level, especially high in the case of the low-income north and central-eastern states (this will cover many of your points in billing & distribution)
  The gap between discoms’ costs and revenues is high in the absence of regular and commensurate tariff hikes
  Electrification push without cost restructuring
  Economic fallout of the pandemic(no demand from industries which generated high revenues due to cross subsidization)
  
  Point about collection is fine. Try to incorporate the above points.
  
  Way forward is fine, you can add some points- need of a national power distribution company,
  deduct discom dues, owed to both public and private power generating companies, from state balances with the RBI forcing states to take the necessary steps to fix discom finances etc, points regarding infrastructure development is fine, you can also talk of rationalizing tariffs.
  
  Try to answer this from the discom point of view rather than consumer point of view.
  
  Read some other answers, keep writing. 🙂
June 21, 2021

Murari Jha

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1. June 25, 2021
  
  Swatantra
  
  Murari
  
  Nice attempt. You have mentioned some of the key points.
  Introduction is fine. You can also mention about UDAY scheme, one of the important schemes of the government.
  
  Points in issues are good- mention AT&C(aggregate technical and commercial )losses currently stand at 21.7% at the all-India level, especially high in the case of the low-income north and central-eastern states( both data and keyword will add value)
  Electrification push without cost restructuring in recent times can also be mentioned.
  
  Way forward is fine, some points can be improved- deduct discom dues owed to both public and private power generating companies, from state balances with the RBI forcing states to take the necessary steps to fix discom finances – this is more concrete step, also you can mention about rationalizing tariffs.
  
  Add a concluding statement. Read some other answers.
  
  Keep writing. 🙂
June 21, 2021

Chandrama Mukhopadhyay

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@swatantra sir

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1. June 25, 2021
  
  Swatantra
  
  Chandrama
  
  Second part of your answer is good, first part can be better.
  
  First of all mention some of the efforts of the centre( ‘several efforts’ mentioned in question) – you can talk about the liquidity support of more than 3 lac crore budgeted over next 5 fiscals, also UDAY scheme can be mentioned.
  
  Also discoms don’t produce power, they are just in charge of distribution, power generating companies are different, you can make that correction in the introduction.
  
  In reasons for dismal performance, you have repeated points for example first, second and last point is almost same about poor infrastructure- can mention some data to bring some variety- AT&C(aggregate technical and commercial )losses currently stand at 21.7% at the all-India level, especially high in the case of the low-income north and central-eastern states.
  
  Also you have mentioned a point about lack of funds from centre and then in later part you have mentioned that financing should be last step, that is contradictory, rather you can mention about states not paying subsidy bills on time.
  
  Some other points you can mention:
  The gap between discoms’ costs and revenues is high in the absence of regular and commensurate tariff hikes
  
  Electrification push without cost restructuring
  
  Economic fallout of the pandemic(no demand from industries which generated high revenues due to cross subsidization)
  
  Way forward and conclusion is good. No need for much changes.
  
  Read some other answers. Keep writing. 🙂
June 21, 2021

ankita thakur

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1. June 25, 2021
  
  Swatantra
  
  Ankita
  
  Good attempt, since the question mentions ‘several efforts’ , you can add liquidity support of more than Rs 3 lac crore budgeted over next five fiscals, UDAY scheme in measures taken by government.
  
  Points mentioned in reasons for efficiencies are good – you can add a data based point- AT&C(aggregate technical and commercial )losses currently stand at 21.7% at the all-India level, especially high in the case of the low-income north and central-eastern states.
  
  Way forward is also good. Additionally you can mention the need to rationalize tariffs, improve infrastructure(smart metering etc) to cut down on losses.
  
  Conclusion is fine.
  
  Read some other answers. Keep writing. 🙂
June 22, 2021

Sonal Sharma

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Kindly review

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1. June 25, 2021
  
  Swatantra
  
  Sonal
  
  Introduction is fine, SAUBHAGYA is not for discoms, so you can avoid, instead you can use the liquidity support data from the recent budget. Mention of UDAY is good.
  
  Points in issues are good, you can mention AT&C losses there only, also you can add the failure of states to pay subsidy bills on time as one of the issues.
  
  Points in way forward are good too. Point 1 and 2 seems a bit contradictory though, one is asking for nationalization, other for privatization. You can integrate them by saying that since the efforts at privatization haven’t proved successful, the idea of national power distribution company can be pondered upon.
  
  Overall very well written answer, not much change needed.
  
  Read some other answers. Keep practicing. 🙂
June 22, 2021

Vishal Nagle

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Please review

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1. June 25, 2021
  
  Swatantra
  
  Vishal
  
  Introduction is fine. Steps taken by government is fine too. You can mention some data from the recent budget, more than Rs 3 lac crore liquidity support fir next 5 fiscals.
  
  Issues mentioned are okay. However, some key points are missing. Also use terms like AT&C losses. Some points you can add:
  AT&C losses currently stand at 21.7% at the all-India level, especially high in the case of the low-income north and central-eastern states
  The gap between discoms’ costs and revenues is high in the absence of regular and commensurate tariff hikes
  Electrification push without cost restructuring
  Economic fallout of the pandemic(no demand from industries which generated high revenues due to cross subsidization)
  
  In way forward, point about tariff rationalization ans infrastructure development is good. You can again add some:
  need of a national power distribution company,deduct discom dues owed to both public and private power generating companies from state balances with the RBI forcing states to take the necessary steps to fix discom finances etc
  
  Conclusion is fine. You can use hub spoke diagrams to adjust some of the points.
  
  Read some other answers. Keep practicing. 🙂
June 22, 2021

Sana Nawazish

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Please review
@swatantra

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1. June 25, 2021
  
  Swatantra
  
  Sana
  
  Structure of the answer is good. Use of diagrams is also appreciated.
  
  In the introduction add some more steps taken such as more than Rs 3 lac crore liquidity support announced in the recent budget for the next 5 fiscals, also mention UDAY scheme.
  
  Points in problems are good. You can mention data regarding AT& C losses( current – 21.7%, target nearly 16%) and some other reasons like electrification push without cost restructuring and economic fallout of the pandemic(no demand from industries which generated high revenues due to cross subsidization).
  
  In way forward, you can suggest some ways to overcome the fund crunch due to states’ non- repayment:
  Deduct discom dues owed to both public and private power generating companies from state balances with the RBI forcing states to take the necessary steps to fix discom finances or link state borrowings to reforms. Other points are good.
  
  Conclusion ia fine too.
  
  Read some other answers. Keep writing. 🙂
  
  6.5/10
June 22, 2021

Harshaa Sharma

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1. June 25, 2021
  
  Swatantra
  
  Harshaa
  
  Since ‘several efforts’ is mentioned in the question, talk about some steps government has taken in introduction- you can mention the liquidity support of more than Rs 3 lac crore announced in this budget or some provisions of the UDAY scheme.
  
  In reasons you have touched upon many points, that is good but you have made it too concise. You can mention data regarding AT&C losses(21.7%), issues of non payment of subsidy bills by states on time and the effects of pandemic(due to fall in demand from industries, much of the revenue generated due to cross-subsidization has been lost).
  
  Last paragraph consisting way forward is good, also you can talk of increasing competition through privatization and some ways to overcome the fund crunch due to states’ non- repayment:
  Deduct discom dues owed to both public and private power generating companies from state balances with the RBI forcing states to take the necessary steps to fix discom finances or link state borrowings to reforms etc
  
  Your knowledge and structure of the answer is good, you can use pointwise format for writing in a more detailed way.
  
  Read some other answers. Keep writing. 🙂
  
  5.5/10
June 22, 2021

Rohan Sinha

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@swatantra

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1. June 25, 2021
  
  Swatantra
  
  Rohan
  
  Good attempt, since the question mentions ‘several efforts’ , you can add liquidity support of more than Rs 3 lac crore budgeted over next five fiscals, 1-2 provisions of UDAY scheme in measures taken by government in introduction.
  
  Rest of the answer is fine, some points can be added for example impact of pandemic in factors responsible, much of the cross-subsidization revenue that came earlier from industries have reduced due to suppressed demand.Also you can mention data regarding AT & C losses.
  
  Similarly in way forward also some points can be added for example rationalization of tariff structures, improvement in infrastructure, smart metering etc
  
  Conclusion is good. Overall well written answer.
  
  Keep writing. 🙂
June 22, 2021

Dr. House

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Please review @Swatantra Sir

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1. June 25, 2021
  
  Swatantra
  
  Dr House
  
  Mention some of the steps taken by the government in introduction, more than Rs 3 lac crore budgeted as liquidity support to Discoms over the next five fiscals. Can also mention some provisions of the UDAY scheme.
  
  Issues mentioned are good, you have articulated them well, also mention about non payment of subsidy bills on time by the states, that is a major issue.
  
  In way forward also, you can mention about ways to solve this issue of fund crunch-
  Deduct discom dues owed to both public and private power generating companies from state balances with the RBI forcing states to take the necessary steps to fix discom finances or link state borrowings to discom reforms etc
  Rest of the points are fine.
  
  Conclusion is good.
  
  Read some other answers. Keep writing. 🙂
  
  5.5/10
June 22, 2021

Santosh kharat

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1. June 25, 2021
  
  Swatantra
  
  Santosh
  
  Mention some of the steps taken by the government in introduction, more than Rs 3 lac crore budgeted as liquidity support to Discoms over the next five fiscals. Can also mention some provisions of the UDAY scheme.
  
  Points in factors are good, you can add the issue of non repayment of subsidy bills by the states on time.
  Also in recent times we are seeing an electrification push by the government without cost restructuring. This has impacted discom revenues.
  
  Way forward is good too, you can talk about rationalization of tariff, smart metering etc
  
  Conclusion is fine.
  
  Your content is good, work a bit on presentation especially handwriting, clarity etc
  
  Read some other answers. Keep writing.
  
  5.5/10
June 23, 2021

Kartikey Singh

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1. June 25, 2021
  
  Swatantra
  
  Kartikey
  
  Introduction is very good, mention of steps taken is good too, you can mention some data about liquidity support from the recent budget.
  
  Issues are fine, you can talk about non repayment of subsidy bills by the states on time.
  
  In way forward, you can either talk of increasing competition via privatization or a solution can be a national power distribution company. Also, deducting discom dues owed to both public and private power generating companies from state balances with the RBI forcing states to take the necessary steps to fix discom finances can be mentioned.
  
  Overall well written answer. Read some other answers too. Keep writing. 🙂
June 23, 2021

shivanshu pandey

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1. June 25, 2021
  
  Swatantra
  
  Shivanshu
  
  Mention some data from the budget or 1-2 provisions of the UDAY scheme in introduction to justify ‘several efforts’ mentioned in the question.
  
  Issues are fine, you can talk about non repayment of subsidy bills by the states on time as one of the reasons.
  
  In way forward you can add some ways to solve this issue of fund crunch-
  Deduct discom dues owed to both public and private power generating companies from state balances with the RBI forcing states to take the necessary steps to fix discom finances or link state borrowings to discom reforms etc
  Rest of the points are fine.
  
  Conclusion is also a way forward, you can mention idea of national power distribution company there.
  
  Good attempt. Keep writing.🙂
June 24, 2021

Vishnu Agrawal

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1. June 25, 2021
  
  Swatantra
  
  Vishnu
  
  Mention some data from the budget or some provisions of UDAY scheme in introduction to emphasize your point.
  
  Reasons mentioned are good, you can talk about non repayment of subsidy bills by the states on time.
  
  In way forward you can mention about the need to rationalize tariffs, improve infrastructure, introduce smart metering etc
  
  Rest of the points are fine.
  Finish with a concluding statement.
  
  Read some other answers. Keep writing.
  
  6.5/10
June 24, 2021

Arpit Singh

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1. June 25, 2021
  
  Swatantra
  
  Arpit
  
  Introduction is fine, mention of steps taken is good too. I think government has budgeted a liquidity support of Rs 3.05 lac crore spread over 5 years in the recent budget, please cross check the data once.
  
  Points in factors are good, you can add the issue of non repayment of subsidy bills by the states on time.
  Also in recent times we are seeing an electrification push by the government without cost restructuring. This has impacted discom revenues.
  
  Measures too be taken are fine, you can also mention some basic ones like rationalization of tariffs, infrastructure improvements, smart metering etc
  
  Conclusion is good.
  
  Nice attempt overall. Keep writing. 🙂
  
  6.5/10
June 25, 2021

Saheli Sharma

not able to upload pdf here

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June 25, 2021

Saheli Sharma

@ Swatantra Sir . Please Review. PAYMENT ID _HQ3P5UFSBXxM9V.

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June 25, 2021

Saheli Sharma

Please review Q2. as well @ Swatantra Sir. PAYMENT ID _HQ3P5UFSBXxM9V

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June 27, 2021

Deepali Rajan

kindly review @swatantra sir
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