A substantial share of Haryana government spending during 2017-18 was made towards state’s energy sector, according to a recent report by the Comptroller and Auditor General of India (CAG). While Haryana stands at the third position among states when it comes to DISCOM quarterly performance ranking by the Power Ministry, a look at the state’s budgetary allocations would reveal how the government’s funds are forcefully squeezed into the distressed sector.
As per the CAG’s audit report on state finances of Haryana government 2017-18, revenue expenditure amounted to Rs 73,257.3 crore, which was 83% of the total expenditure (Rs 86795.2 crore) and the capital expenditure was Rs 13,537 crore during the year.
Consider these three observations of the audit report: Of the total Rs 8,446 crore spent towards subsidies under revenue expenditure, 90% (Rs 7624 crore) were allocated only for the energy sector. During 2017-18, the government’s capital expenditure increased by Rs 6,675 crore (97%) as compared to the previous year as power sector loans amounting to Rs 5,190 crore under Ujwal DISCOM Assurance Yojana (UDAY) scheme were converted into equity. Of the total investments (Rs 5,755 crore) made by the state, 95% or Rs 5,454 crore was invested in the equity capital of power companies, all of them are loss making companies.
These massive intensives to the energy sector can be attributed to the central government's UDAY scheme, a revival package for making DISCOMs financially and operationally viable so they can supply adequate power at affordable rates. Although, the UDAY scheme was launched in 2015, it has failed to revive the financial crisis-gripped energy sector in the country.
Here is the share of government spending on the energy sector in the last few years. The revenue expenditure on energy sector was Rs 1,0219.9 crore in 2015-16 has increased to Rs 10,542 crore in 2016-17 and the figure has slightly came down to Rs 10230.3 crore in 2017-18, as per the data from RBI.
Similarly, the capital expenditure on energy sector has been substantial. During 2015-16, the state government spent Rs 1,597.5 crore as capital expenditure in the energy sector. The figure was Rs 1,894.7 crore in 2016-17 and Rs 5,190 crore in 2017-18.
Despite attempts for boosting the energy or power sector in the state through massive fundings and concessions over the years, the state government’s inability to revive the crucial sector which is mired in financial crisis point out the holes in the UDAY scheme.
While the majority of the sharing is going to the energy sector, the total outstanding liabilities of the state government has increased from Rs 7,9610 crore in 2014 to Rs 1,66,150 crore in 2018 revised estimates of the state budget.
On the other hand, Haryana’s two state-owned power utilities -- Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN) and power plants --
Panipat Thermal Power Station, Deen Bandhu Chhotu Ram Thermal Power Plant and Rajiv Gandhi Thermal Power Plant are running in losses over the past few years.