In India, the total debt owed by the electricity distribution industry increased to 6.20 lakh crore in 2021–22, a 24% increase from 2019–20. Yet throughout the course of the two years, the rate of debt addition declined, according to Power Finance Corporation Ltd.'s annual report on the industry. In 2021–2022 the sector's debt increased by 33,800 crore, which is 60% less than the 85,500 crore increase in the previous fiscal year. State government loan takeovers,
improvements in subsidy disbursement, and better bill collections, the sector's financial deficit almost halved in 2021–22 compared to 2019–20. Financial deficit is a crucial metric for assessing the sector's financial stability. The report used a cash-adjusted basis to assess the deficit, putting more emphasis on tracking cash movements than recorded revenue. Due to the effect of Covid-19, the performance in 2021–22 was compared to the two fiscals before that.
Power distribution firms' total technical and commercial losses decreased by 3.4 percentage points and 5 percentage points, respectively, from the prior year and from 2020-21 to 16.5% in 2021–22. According to the research, capital expenditure addition decreased to 48,000 crore in FY22 from 59,000 crore the year before and 83,000 crore in 2019–20, which is cause for concern.
For long-term rewards, the industry should aggressively concentrate on modernising its billing system, it suggested. The amount of subsidies paid out by state governments in 2021–22 was 102% of the total amount booked, up from 85% the year before and 95% in 2019–20.
