DISCOMs’ dues shrink to near-zero after major power sector reforms: NLC

Chennai: Public-sector major NLC India Ltd (NLCIL), a lignite-cum-power producer, said that power sector dues have dropped sharply in recent years, with State Electricity Boards (SEBs) now clearing payments on time after a decade of systemic reforms.

"There has been a paradigm shift in the country's power supply situation. We have moved from a power-deficient scenario to a power-sufficient one, driven by several positive reforms," said M Prasanna Kumar, CMD, NLC India.


Earlier, SEBs often delayed payments to power generators, creating major challenges. "If you go back four–five years, NLCIL's dues alone were over Rs 12,000 crore to Rs 13,000 crore. But with the reforms and measures taken since then, dues have come down sharply. Our outstanding dues are now almost nil — around Rs 1,500 crore, and these are mostly current bills," he said.

A key driver has been reforms mandating the timely payment of power bills. States now face clear directives: if dues remain unpaid beyond 75 days, generators are permitted to curtail supply. This mechanism, combined with rising consumer expectations for uninterrupted power, has pushed SEBs to ensure 24/7 supply and maintain financial discipline.

The improvement is visible across states, including Tamil Nadu, where dues to NLCIL are now described as "very minimal." Kumar noted that citizens no longer tolerate power cuts, prompting state utilities to proactively procure power and keep payments current.

According to Central government data, dues owed to power generators by state distribution companies stood at about Rs 56,600 crore (including a current due amount of Rs 36,908 crore) as of Dec 2, 2025.

India has implemented several major reforms, including UDAY to strengthen discom finances, late payment surcharge rules to penalise delays and clear legacy dues, and SECI's Payment Security Mechanism featuring escrow accounts, a security fund and state guarantees. Together, these measures have reduced risks and encouraged greater investment in the power sector, the International Energy Agency noted in a recent report.



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