‘Govt faces major gap between cost of power supply, revenue collection’

Jammu, Mar 7: The government Friday said it was facing a major gap between the cost of power supply and revenue collection saying that it recovers only 35 percent of average cost per unit.
Chief Minister Omar Abdullah in his Budget 2025-26 speech said, “One of the key challenges we face is the gap between the cost of power supply and revenue collection.”
Omar said,” While the average cost per unit is Rs 7, we recover only Rs 2.5 due to systemic inefficiencies, high losses, and low tariffs. To bridge this gap, our government is implementing 100 percent smart metering, strengthening billing and collection mechanisms, and modernizing the entire distribution network.”
He further said that such measures will enhance efficiency, reduce commercial losses, and improve revenue realization.
Pertinently, the government announced that for the Power Sector an allocation of about Rs 2021.37crore has been made under capital expenditure for the year 2025-26 which is Rs 762.80 crore more than the revised allocation of 2024-25.
Omar further said, “Our goal is to bring down Aggregate Technical and Commercial (AT&C) losses from 41 percent to 25 percent by 2025-26, ensuring a financially sustainable power sector.”
On the occasion, the CM proposes free 200 units of electricity for AAY families.
“To provide financial relief and energy security to the most vulnerable, I propose to provide 200 units of free electricity per month to all Antyodaya families in Jammu & Kashmir,” he said.
The CM further said that integration with the PM Surya Ghar Bijli Yojana will enable the installation of grid- connected solar systems, generating the required power and eliminating electricity bills,”
“With an investment of Rs 750 crore spread over five years, this step will also reduce AT&C losses and promote sustainable energy. I urge this august House to support this transformative move towards a greener, more inclusive, and self-reliant Jammu & Kashmir,” he said.
In the meantime Omar further said that the high AT&C losses has resulted in huge outstanding liabilities for power purchase.
“High AT&C losses resulted in huge outstanding liabilities for power purchase, for which Rs 28,000 crore were borrowed in the last few years, raising public debt from 48 percent of GSDP in FY 2015-16 to 52 percent in 2023-24,” the CM said.
He said that in order to mitigate the issue, the government was reducing high-cost debt, optimizing liabilities, and calibrating the repayment schedules for long-term fiscal stability. (KNO)