Report of Indian Institute of Public Administration ... - Ministry of Power

Haryana
3000
2500
2000
15 0 0
10 0 0
500
0
1119
586
533
Status of Gross Receivables of Discoms in Haryana
1316
695
621
1605
819
786
31.3.2000 31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005
2.39
1777
900
878
DHBVNL UHBVNL T otal Har yana Di scoms
The disturbing trend in the matter of receivables in respect of UHBVNL is that
agricultural and domestic categories together accounted for about 82 per cent of the
arrears that got accumulated in this period.
Financial Gap in Distribution Sector
The Commission has not made any tariff revision since 2001, except for domestic and
agricultural consumers. While determining the revenue gap in the sector, HERC
considers the approved Aggregate Revenue Requirement (ARR) for the year and
works out the gap by matching the ARR against the total revenue from the current
retail tariff for various consumer categories.
The revenue gap so worked out is because of the fact that the approved tariffs for
domestic and agricultural consumers are non-compensatory in Haryana. The amount
of cross-subsidy generated by other consumer categories is used to fully cover the
revenue gap in case of domestic category, leaving behind cross-subsidies available for
the agriculture pumpset consumers. This cross-subsidy adjustment leaves a net
revenue gap, which is to be provided as subsidy by the State Government towards the
agricultural pumpset consumers.
While the ARR is met through the revenue from sale of power and subsidy available
from the Government, under-performance by the DISCOMs to recover the revenue
billed leaves a huge gap in the sector. The financial gap in the distribution sector, as
shown in the table, is supported by the subsidy support by the State Government.
However, the gap is further increased in case it is calculated on a revenue-realised
basis. The gap is showing an increasing trend. This is primarily on account of the
large amount of receivables.
2218
1128
1090
2852
1438
1414