NEW DELHI - A growing pile of unpaid bills in India's power sector is risking the country's development, Prime Minister Narendra Modi said, urging states to clear up their arrears to help modernise power systems.
As a result, the utilities have racked up more than 1 trillion rupees in overdue payments to generators, leaving the distributors with inadequate resources to overhaul their networks. Nearly 90 per cent of India's electricity is sold through these utilities and their inability to pay on time is seen as impeding investments in the country's energy transition.
Political interference also means they are forced to supply power below cost to some consumers, including poor households and farmers, although the compensation from the state governments on such subsidised supplies isn't always regular.