Srinagar, Dec 2: Jammu and Kashmir’s power sector is facing one of its most severe financial crunches in recent years, with the total accrued power purchase liability touching Rs 4751 crore as of September 30.
The staggering figure, accessed through official records, reflects an ever-widening gap between the cost of purchasing electricity and the revenue realised from consumers, a gap that has continued to deepen despite repeated reform attempts.
According to the Detailed Liability Statement, the single largest outstanding amount is owed to J&K’s own generation utility – the Jammu and Kashmir Power Development Corporation (PDC), along with the Baglihar Hydroelectric Project (BHEP) – which together are awaiting dues of Rs 2675 crore.
Central public sector undertakings are also among the major creditors, with NTPC owed Rs 638 crore and NHPC Rs 449 crore.
The transmission giant Power Grid Corporation of India Limited (PGCIL), now Grid India, is awaiting Rs 172 crore.
Apart from these, private power generators, including Jindal Power and RKM (Talcher and IB) are owed a combined liability of nearly Rs 300 crore.
Smaller dues remain pending with NPCIL, Meja, SJVNL, and THDC, indicating that arrears are spread across almost every source from which J&K procures electricity.
Officials familiar with the financial position of the power sector said the liability has accumulated primarily due to J&K’s chronic Aggregate Technical and Commercial (AT&C) losses, which remain among the highest in the country.
The cost of supplying electricity in J&K is estimated at around Rs 7 per unit, while the average realisation from consumers is just about Rs 2.5 per unit.
This structural imbalance has resulted in year-on-year accumulation of arrears, even as the government continues to spend heavily on power purchases to bridge the demand-supply gap.
The crisis becomes clearer when viewed over a longer period.
Over the past decade alone, J&K has spent Rs 55,254 crore on purchasing electricity from outside power companies.
The financial outflow has grown steadily, with J&K spending Rs 8197 crore to buy 16,207 million units of electricity in 2021-22 – the highest in 10 years.
In 2020-21, the government spent Rs 7047 crore for 14,362 million units, while in 2019-20, the expenditure stood at Rs 6987 crore for 13,345 million units.
The upward trend is evident in earlier years as well, with power purchase spending at Rs 6561 crore in 2018-19, Rs 4844 crore in 2017-18, and Rs 4752 crore in 2016-17.
Between 2012-13 and 2015-16, J&K’s annual spending on electricity gradually rose from Rs 3382 crore to Rs 4803 crore.
Officials said these numbers highlight the rising financial burden despite repeated attempts to reform billing, metering and revenue collection.
The high cost of power procurement, combined with low revenue recovery, has led officials to rely heavily on schemes such as the government’s amnesty scheme, which focuses on recovering principal amounts while offering waivers on interest and penalties.
However, senior officials admit that such measures only provide temporary breathing space and do not address the structural leakages responsible for the widening financial deficit.
Electricity theft, meter bypassing, unmetered consumption, and inefficient billing systems contribute significantly to the financial stress.
