Total dues to GESCOM cross ₹4,000 crore

Free electricity for irrigation pumpsets of farmers being offered by governments through various schemes appears to have proved costly for the State-owned Gulbarga Electricity Supply Company (GESCOM).

Free electricity for irrigation pumpsets of farmers being offered by governments through various schemes appears to have proved costly for the State-owned Gulbarga Electricity Supply Company (GESCOM). With government subsidy dues growing, GESCOM is forced to borrow from various financial institutions to manage its operations and ultimately, transfer the burden onto consumers by increasing power tariff.

The State Government began offering free electricity for pumpsets in 2007-08 and subsidy dues payable to GESCOM continued to pile up every year as the government made partial payment for the power consumed by the beneficiaries. By December last year, the principal irrigation pumpset subsidy dues stood at ₹1,470.34 crore and interest calculated at 12% per annum and charged on dues every year grew to ₹1,733.43 crore, thus taking gross dues to ₹3,203.77 crore.

It is similar in the case of Ganga Kalyan Scheme. Different State-owned corporations that got the scheme implemented for their targeted beneficiaries never cleared dues payable to GESCOM in the last 20 years. Partial payment has thus resulted in the accumulation of ₹502.25 crore dues by December last year. Interest calculated at 12% per annum and charged on arrears every year grew to ₹297.74 crore, taking gross dues under the scheme to ₹799.99 crore. The total government dues payable to GESCOM has thus crossed ₹4,000 crore, which includes the arrears of irrigation pumpset subsidy and Ganga Kalyan scheme as well as interest levied on arrears.