Sorry state of State Electricity Boards (SEBs) - Chart Of The Day 3 March 2015 - Equitymaster
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Sorry state of State Electricity Boards (SEBs)

On This Day - 3 March 2015
« Sorry state of State Electricity Boards (SEBs)

That India's power sector is riddled with a variety of problems is a fact well known. While the demand for power has only increased, the government has not been able to stick to its targets of power production. What more, there are considerable challenges on the distribution side as well. The most pressing case is the sorry state of affairs at State Electricity Boards (SEBs). SEBs have had to bear the burden of subsidies and have not been able to raise power tariffs. Indeed, as the chart shows, the amount of subsidies booked for SEBs has only increased over the years. As against this, the subsidy actually received has only been on the lower side. This has put a strain on the balance sheets of SEBs. Generation companies, too, are put under pressure as the plant load factor (PLF) comes down.

Indeed, unless quite a few of the issues relating to the power sector are resolved, the impact of this will be felt by banks too especially those who are considerably exposed to the power sector.

Data Source: Mint

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