The energy sector in Andhra Pradesh has received 3.11% of the State’s total budgetary allocation of Rs 2.25 lakh crore for the year 2020-21.
The state government has allocated budgetary estimates of Rs 6,984.73 crore to the energy sector, of which Rs 4000 crore (57%) is earmarked to ensure ‘nine-hour free power supply for agriculture’ alone.
To provide free power to agriculture under the ‘YSR 9-hour free power supply’ scheme, the government has decided to establish AP Green Energy Corporation with a mandate to install 8 GW to 10 GW of dedicated solar power capacity.
Significantly, the 2020-21 budgetary estimate of Rs 6984.73 crore for energy is much lower than 2019-20’s revised estimate of Rs 11,639 crore.
Citing that more than 75% of the power sector expenditure is due to power purchase costs, finance minister Buggana Rajendranath said that the government was reviewing all high-cost power purchases.
“The government inherited a power sector which, contrary to popular perception, was in severe financial distress. There were about Rs 20,000 crore of outstanding power purchase dues, Rs 29,147 crore of Discom losses and Rs 15,500 crore of government dues to be paid to Discoms,” the minister added.
He stated that despite the severe financial crunch, the government stabilised the power sector by releasing more than Rs 13,000 crore during 2019-20, which surpassed the cumulative releases in the previous five years.
The government has proposed to consolidate the gains expected with power sector reforms, with emphasis on ensuring quality power supply to agriculture, industry and domestic consumers.
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It is very easy for the politicians to take such decisions, when they know that the IPP’s can always be made scape-goats by refusing to honour the contracts
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