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MSEDCL reels under ₹38,000-crore debt due to fall in revenue

Our Bureau Pune | Updated on July 03, 2020 Published on July 03, 2020

MSEDCL has suffered heavy losses as 60 per cent of its revenue comes from the industrial and commercial sector   -  Bloomberg

State seeks ₹10,000-crore aid to streamline MSEDCL operations

A lull in the industrial sector due to the lockdown has landed Maharashtra State Electricity Distribution Co Ltd (MSEDCL) in a debt trap. The distribution company has suffered heavy losses as 60 per cent of its revenue comes from the industrial and commercial sector which stands paralysed since March.

State Energy Minister Nitin Raut in a letter to the Central government has demanded ₹10,000 crore in aid to streamline the MSEDCL operations. Raut said the discom is facing an unprecedented crisis for the last three months as revenue coming from industries and the business sector has plummeted. The Minister added that the company is facing revenue deficit as it has to provide electricity to domestic consumers and farmers at concessional rates.

Interestingly, the MSEDCL approached various banks seeking financial assistance but was turned down.

From September 2018 to March 2020, the MSEDCL has taken a loan of ₹18,600 crore to purchase power. It also availed a loan of ₹16,720 crore for basic infrastructure development projects and overdraft of ₹3,500 crore for working capital.

Raut in his letter said that financial condition of the company would deteriorate if the Centre fails to provide assistance.

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Published on July 03, 2020
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