Profitable on paper, PSPCL looks to borrow ₹10,000 crore

The Punjab State Power Corporation (PSPCL) is looking to raise up to ₹10,000 crore in fresh borrowing, even though its latest accounts show a profit on paper. The move is being driven by the state government’s slow progress in clearing nearly ₹9,600 crore that remains unpaid in subsidy reimbursements and power bill dues, according to PSPCL officials. PSPCL officials said the outstanding amounts are creating cash‑flow pressure, prompting the corporation to seek additional debt to meet its operational needs. While the corporation has posted earnings that indicate financial health, the delayed payments have left a sizable liability that cannot be ignored. The pending subsidy and bill amounts include both outstanding recoveries from consumers and pending government payments, highlighting the complex nature of the utility’s cash flow. The borrowing plan, if approved, would add to the state’s overall debt burden, a factor that may influence fiscal calculations in the coming budget. The situation underscores the difficulties state utilities face when subsidy payments lag, affecting their ability to fund operations and upgrades. The central and state governments are currently discussing reforms to streamline subsidy disbursement and improve collection efficiency. PSPCL’s leadership has indicated that the new financing will be used to sustain operations and invest in infrastructure upgrades, though specific timelines for the borrowing were not disclosed. The state government has not yet responded publicly to the request, but the delay in clearing the dues remains a point of concern for the utility’s fiscal planning.

Source: Hindustan Times