The Uttar Pradesh government, while presenting a supplementary budget in the state assembly on Monday, revealed a significant financial request from its power utility. The Uttar Pradesh Power Corporation Limited (UPPCL) has sought an additional infusion of Rs 3,744.45 crore to offset losses suffered by its five distribution companies.
Funding for Revamped Distribution Sector Scheme
This substantial sum is primarily aimed at compensating losses incurred under the central government's Revamped Distribution Sector Scheme (RDSS). The RDSS is a major reform-oriented initiative designed to improve the operational and financial efficiency of power distribution companies across India. The request highlights the ongoing financial challenges within the state's power distribution network, despite broader reform efforts.
In a separate but related development, the Union Power Ministry recently commended Uttar Pradesh in a report presented in the Lok Sabha. The report praised the state for achieving a 25% reduction in its outstanding power sector debt over the last five years. Officials credited this positive trend to the structural reforms implemented through the RDSS framework.
Additional Request for SGST Reimbursement
Beyond the massive compensation for distribution losses, UPPCL has also submitted a request for Rs 100 crore. This separate allocation is intended for the reimbursement of State Goods and Services Tax (SGST) paid on various works and projects linked to the RDSS. This indicates the complex fiscal layers involved in executing large-scale infrastructure and reform schemes in the power sector.
Context and Implications
The timing of this large supplementary budget request is noteworthy. It comes shortly after the central government's public acknowledgment of Uttar Pradesh's progress in managing its power debt. The dual narrative presents a picture of a sector in transition—where reform-driven gains in reducing legacy debt coexist with immediate, substantial financial requirements to cover operational losses at the distribution level.
The supplementary budget tabled in the Vidhan Sabha will now be subject to legislative approval. The decision on allocating these funds to UPPCL will be closely watched, as it has direct implications for the financial health of the state's power distribution companies and their ability to continue modernization and loss-reduction efforts under the RDSS.
