Between the last time Parliament met in March 2020 and the ongoing Monsoon session (a period of nearly six months), the government issued 941 notifications across sectors in response to the COVID-19 pandemic.  It also announced a Rs 20 lakh crore economic package to improve the state of the economy and provide relief to those affected by the nationwide lockdown.  In addition, the government also proposed long-term policy changes during this period in sectors such as agriculture, economy, and education.

 

One of the key roles of a Member of Parliament (MP) is to hold the government accountable for its policies and actions.   Parliamentary questions are one of the key instruments MPs use to exercise this role.  Questions help MPs seek information from the government on matters of public importance and on the status of implementation of its policies and programmes.  

However, in view of the prevailing extraordinary situation due to COVID-19, both Lok Sabha and Rajya Sabha have suspended their Question Hour, which would have allowed MPs to seek oral responses from Ministers and ask follow-up questions.  However, unstarred questions are admitted, for which written answers are provided.

This post provides an overview of the government’s response to some of the key questions raised by MPs during the first five days (September 14, 2020, to September 18, 2020) of the session. 

Unstarred questions in the Monsoon session

A total of 1,950 unstarred questions have been asked in the first five days of the Monsoon session of the Parliament (1,150 questions in Lok Sabha and 800 questions in Rajya Sabha).  The Ministries in focus for the questions were: Health (154 questions), Agriculture (127 questions), Education (104 questions), Finance (96 questions), and Railways (80 questions).

Questions ranged from the impact of the lockdown to strategy for vaccine procurement, to the status of the programmes announced to alleviate COVID related issues.  Besides COVID-19, there were questions around India-China trade, locust attacks, and custodial deaths. 

On COVID-19 testing and vaccine strategy

Testing data and Health infrastructure: In response to a question, the government informed that India is conducting nearly 10-11 lakh tests every day and so far, a total of 6.05 crore samples have been tested for COVID-19.  Nearly 40% of the confirmed cases are persons between the age of 26-44

To improve health capacity, as of Sep 15, a total of 15,360 COVID treatment facilities have been created with:

  • 13,20,881 dedicated isolation bed (without oxygen support)
     
  • 2,32,516 oxygen supported isolation beds
     
  • 63,194 ICU beds (including 32,409 ventilator beds)

Vaccine development: The Central Drugs Standard Control Organisation has granted permission for conduct of clinical trials in the country to the following: (i) Bharat Biotech International Ltd. and Cadila Healthcare (these are in phase 1 and phase 2 of trials), and (ii) Serum Institute of India Pvt. Ltd (for vaccine developed by University of Oxford/AstraZeneca - this is in Phase 3, or advanced phase, of the trials).  

The government is also exploring the possibility of cooperation with Russia for advancing the COVID-19 vaccine in India.  

Health insurance: The Ministry noted that data on the number of healthcare workers who are infected by COVID-19 or who have lost lives during COVID duty is not maintained at the central level.  As per data from the Pradhan Mantri Garib Kalyan Insurance Package, a total of 155 medical staff, including 64 doctors, have died due to COVID-19.  The scheme provides an insurance cover of Rs 50 lakh (including loss of life) to healthcare providers, including community health workers, who may have come in direct contact of COVID-19 patients and who may be at risk of being impacted by this.  

Under the Ayushman Bharat Scheme, a total of 4.03 lakh hospitalisations have been registered (and authorised) towards the treatment of COVID-19.  Under Ayushman Bharat, the government provides health cover of five lakh rupees per family per year, for secondary and tertiary care to around 10.7 crore vulnerable families.

Impact on other health services: In light of COVID-19, that there has been a 19.4% drop in Hepatitis-B birth doses administered and a 31% drop in vaccination sessions held in health facilities and outreach sessions from April-June 2020 as compared to the same period last year.  Similarly, there has been a drop of 23.9% in institutional delivery in the April-June 2020 quarter as compared to the same period last year. 

Impact of COVID-19 on Indian economy

Trade:  Responding to a question on the impact of COVID on exports, the government provided the following data:

  • Overall exports declined by 25.4% during April-June 2020 (compared to the same period in 2019).   However, data for August 2020 shows a recovery in exports with the decline reducing to 12.7% (compared to August 2019). 
     
  • The export of goods from Special Economic Zones (SEZs) was Rs 81,481 crore in the April-June 2020, 37% lower than the corresponding period in 2019 (Rs 1,30,129 crore). 

India-China trade: Members also raised questions on the impact of COVID and the border issue with Ladakh on Indo-China trade.  The government held that it has taken steps to balance the trade with China by increasing exports and reducing import dependence. The trade deficit with China during April-June 2020 was USD 5.5 billion as compared to USD 13.1 billion during the same period last year.   

Table 1: Trade deficit with China (in billion dollars)

Year

2016-17

2017-18

2018-19

2019-20

April - June 2019

April - June 2020

Export

10.17

13.33

16.75

16.61

4.16

5.53

Import

61.28

76.38

70.31

65.26

17.26

11.01

Total Trade

71.45

89.71

87.07

81.87

21.42

16.55

Trade Deficit

-51.11

-63.04

-53.56

-48.64

-13.1

-5.48

Sources: Unstarred Question No. 647, Lok Sabha, answered on September 16, 2020; PRS.

With regard to the import of Active Pharmaceutical Ingredients (bulk drugs), bulk drugs account for nearly 63% of total pharmaceutical imports in India as per government data.  Of these, 68% of the bulk drugs imported by India in 2019-20 were from China.  

Civil aviation: The government informed that the revenue of Indian carriers was down by nearly 86% during April-June 2020, as compared to the same period last year.   

Table 2: Impact of COVID-19 on the civil aviation sector

Indicator

Previously

Now

% Change

Revenue related

April-June 2019

April-June 2020

 

Revenue of Indian carriers

Rs 25,517 crore

Rs 3,651 crore

-85.7%

Revenue of Air India

Rs 7,066 crore

Rs 1,531 crore

-78.3%

Revenue of Airport Operators

Rs 5,745 crore

Rs 894 crore

-84.4%

Employment related

March 31, 2020

July 31, 2020

 

Employment at airlines

74,887

69,589

-7.1%

Employment at airports

67,760

64,514

-4.8%

Employment at ground handling agencies

37,720

29,254

-22.4%

Employment at Cargo operators

9,555

8,538

-10.6%

Traffic related

March-July 2019

March-July 2020

 

Total domestic traffic

5,85,30,038

1,20,84,952

-79.4%

Total international traffic

93,45,469

11,55,590

-87.6%

Sources: Unstarred Question No. 872, Lok Sabha, answered on September 17, 2020; PRS.

Vande Bharat Mission:  The Vande Bharat Mission was launched on May 7, 2020 to facilitate the return of Indian nationals stranded in various countries.  As of September 10, 2020, a total of 13,74,237 Indians have returned to India and the total cost incurred for this effort was Rs 22.5 crore.  Of these, about 3 lakh people were working outside India.  The government stated that SWADES (Skilled Workers Arrival Database for Employment Support) initiative has been launched to conduct a skill mapping exercise of the returning citizens under the Vande Bharat Mission. 

Metro rail:  Due to the lockdown, metro services in different cities came to a halt. This has led to a loss of Rs 1,609 crore for the Delhi Metro.  The loss incurred due to the halting of the other metros was: Rs 170 crore for Bengaluru Metro, Rs 90 crore for Lucknow Metro, Rs 80 crore for Chennai Metro, and Rs 34 crore for Kochi Metro. 

On Shramik special trains and Vande Bharat Mission 

Railways revenue:  As of August 2020, the total revenue of Railways was Rs 41,844 crore, which is a decline of 42% over the corresponding period last year.  Of this, Rs 39,648 crore (95%) was freight revenue. During April to August 2020, the passenger traffic was 1.3% of the traffic in the corresponding period last year, and the freight traffic was 86.7% of the traffic seen in the corresponding period last year.  The total amount of refund made to passengers due to cancellation of trains booked till April 14, 2020 (for the journey period between March 22, 2020 and August 12, 2020) was Rs 3,371 crore.

Special trains:   Several members asked questions about the Shramik special trains, the number of migrant labourers who returned to their home states, and the loss of revenue to railways due to restrictions on travel and movement.  The government responded that 4,621 shramik special trains were run from May 1 to August 31, 2020, which transported 63 lakh passengers across the country. Based on the data provided by states, 97 persons passed away while travelling on Shramik special trains (as of September 9, 2020). A total fare of Rs 433 crore was collected from the state governments for running these special trains.   

The government also started other special trains (15 pairs of Rajdhani Express and special trains for examinations such as JEE and NEET).  The average occupancy in these trains (from May 12 to August 31, 2020) was around 82%

On Migrant labourers, relief measures and MGNREGS

total of 1.05 crore migrant workers have returned to their home state till now (maximum to Uttar Pradesh, followed by Bihar, West Bengal, and Rajasthan).  State-wise details are listed in the table below. 

Table 3: Number of migrant workers who have returned to home-state (as of September 14, 2020)

State

Workers who have returned to the state

Uttar Pradesh

32,49,638

Bihar

15,00,612

West Bengal

13,84,693

Rajasthan

13,08,130

Madhya Pradesh

7,53,581

Jharkhand

5,30,047

Punjab

5,15,642

Assam

4,26,441

Kerala

3,11,124

Maharashtra

1,82,990

Tamil Nadu

72,145

Sources: Unstarred Question No. 197, Lok Sabha, answered on September 14, 2020; PRS.

Responding to a question on whether free grains under the Aatma Nirbhar Scheme had reached the migrant workers, the government stated that no data on the number of migrants/stranded migrant persons across the country was available with the Department of Food Distribution and that the responsibility of identification of beneficiaries under this scheme was entrusted with states.  The government informed that states have indicated about 2.8 crore migrant worker beneficiaries.  As of August 31, 2020, food grains have been distributed to 2.67 crore of the identified beneficiaries for the months of June and July 2020. 

MGNREGS: On whether the migrant labourers have been provided jobs under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the government said that there is no provision to register a job cardholder categorized as a migrant labourer in the card in the scheme.  It stated that a total of 86.82 lakh new job cards have been issued this year so far, against a total of 64.96 lakh cards issued during the same period last year.  The employment provided under the scheme was nearly 100% higher for the months of June and July 2020, as compared to the corresponding months in 2019.  The total demand (from April 2020 to September 12, 2020) for employment under the scheme was 22.5 crore persons, a 39% increase from 16.2 crore persons for 2019-20 (during the same period).  

EPF withdrawal: In March 2020, as part of the relief package, the government increased the withdrawal limit from the Employees Provident Fund (EPF) accounts.  In areas declared to be affected by an epidemic or pandemic, members are permitted to withdraw three months’ salary or 75% of the amount lying in the member’s PF account, whichever is lesser. The government stated that a total of Rs 39,403 crore has been withdrawn from EPF from March 25, 2020 to August 31, 2020.  The withdrawal was highest in the states of Maharashtra (Rs 7,838 crore), Karnataka (Rs 5,744 crore), and Tamil Nadu (Rs 4,985 crore).   

Other questions

Locust attack: Several members sought to know whether the locust attacks caused damage to crops and whether the government has provided any compensation to the affected farmers.   The Ministry of Agriculture responded that the locust incursions were reported in the 10 states of Bihar, Chhattisgarh, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Uttarakhand, and Uttar Pradesh.  The Rajasthan government has reported crop damage of 33% or more in nearly 3,400-hectare area.  Haryana has reported below 33% crop damage in 6,166-hectare area.  No damage was reported in Gujarat, Chhattisgarh, Punjab, and Bihar.  On compensation, the government stated that pest attack has been notified as a natural disaster and states could provide relief under the State Disaster Response Fund.   However, no state government has reported any data yet on the distribution of relief to affected farmers. 

Functioning of virtual courts: The Ministry of Law and Justice informed that 11,93,046 hearings were done by video conferencing between March 24, 2020 and July 15, 2020 by district and subordinate courts across India.  Further, it stated that to handle challenges related to COVID-19, the government has allocated nearly Rs 30 crore for providing video conferencing equipment and facilitating help desk counters for e-filing in various court complexes

Custodial deaths: The government informed that a total of 1,697 persons died under police/ judicial custody, and a total of 112 cases were registered as encounter deaths (from April 2019 to March 2020).  State-wise details are noted below in Table 4 for select states (they comprise 75% of the total custodial and encounter deaths in 2019-20).  On whether the government is considering a legislation to prevent the torture of individuals by police and public officials, the Ministry of Home Affairs informed that police and public order are state subjects and there is no proposal to bring a legislation in this regard

Table 4: Custodial deaths and Encounter deaths across select states (April 2019-March 2020)

State

Custodial deaths

Encounter deaths

Uttar Pradesh

403

26

Madhya Pradesh

157

3

West Bengal

122

1

Bihar

110

5

Punjab

99

1

Maharashtra

94

3

Rajasthan

84

2

Haryana

77

1

Tamil Nadu

69

3

Chhattisgarh

59

39

Sources: Unstarred Question No. 292, Lok Sabha, answered on September 15, 2020; PRS

Last week, the Power Finance Corporation reported that state-owned power distribution companies across the country made financial losses amounting to Rs 68,832 crore in 2022-23.  This is four times higher than the losses witnessed in 2021-22, and roughly equivalent to the annual budget of a state like Uttarakhand.   This blog examines some of the causes and implications of such losses.

Overview of financial losses

For several years now, electricity distribution companies (discoms), which are mostly state-owned, have witnessed steep financial losses.  Between 2017-18 and 2022-23, losses accumulated to over three lakh crore rupees.  In 2021-22, discom witnessed substantial reduction in their losses, primarily because states released 1.54 lakh rupees in subsidies to clear pending dues.  State governments provide discoms with subsidies, so that domestic and agricultural consumers receive affordable power.  These payments are typically delayed which creates cash flow constraints, and leads to an accumulation of debt.  In addition, costs incurred by discoms in 2021-22 remained unchanged.

Note: Data from 2020-21 onwards does not include Odisha, and Dadra & Nagar Haveli and Daman and Diu since their distribution function was privatised in 2020-21.  Data for Ladakh is available from 2021-22 onwards.  Data for Jammu and Kashmir is not available.  The Delhi Municipal Council Distribution Utility has been included from 2020-21 onwards.
Sources: Power Finance Corporation reports for various years; PRS.

As of 2022-23, losses have increased again to reach Rs 68,832 crore.   This increase has been driven by rising costs.  At a per unit level, the cost of supplying one kilowatt of electricity rose from 7.6 rupees in 2021-22, to 8.6 rupees in 2022-23 (See Table 1).

Table 1: Financial details of state-owned power distribution companies

Details

2019-20

2020-21

2021-22

2022-23

Average cost of supplying power (ACS)

7.4

7.7

7.6

8.6

Average revenue realised (ARR)

6.8

7.1

7.3

7.8

Per unit loss (ACS-ARR)

0.6

0.6

0.3

0.7

Total losses (in Rs crore)

-60,231

-76,899

-16,579

-68,832

Note: Data from 2020-21 onwards does not include Odisha, and Dadra & Nagar Haveli and Daman and Diu since their distribution function was privatised in 2020-21.  Data for Ladakh is available from 2021-22 onwards.  Data for Jammu and Kashmir is not available.  The Delhi Municipal Council Distribution Utility has been included from 2020-21 onwards.
Sources: Power Finance Corporation reports for various years; PRS.

Purchase of electricity from generation companies (gencos) forms about 70% of a discom’s total costs, and coal is the primary source for generating electricity.  The following chain of events took place in 2022-23: (i) consumer demand for electricity rose by 10% over the previous year, as compared to a 6% year-on-year increase in the past 10 years, (ii) coal had to be imported to meet the increased demand, and (iii) global coal prices were elevated.

Coal imported at elevated prices to keep up with rising electricity demand

In 2022-23, demand for electricity increased by 10% over 2021-22.  Between 2008-09 and 2018-19, demand increased at an annual growth rate (CAGR) of 6%.  Electricity demand grew as the economy grew (at 7%), and largely came from domestic and agricultural consumers.  These consumer categories account for 54% of the total electricity sales, and their demand rose by 7%.

Sources: Central Electricity Regulatory Commission; PRS.

Electricity cannot be stored at scale, which means that generation must be scheduled depending on anticipated demand.  The Central Electricity Authority anticipates annual demand for each year.  It estimated that demand in 2022-23 would be at 1,505 billion units.   However, the actual demand was higher than anticipated in the first few months of 2022-23 (See Figure 3).

To meet this demand, electricity generation had to be ramped up.  Coal stocks had already depleted from 29 million tonnes in June 2021 to eight million tonnes in September 2021, on account of high demand in 2021-22.  To ensure uninterrupted supply of power, the Ministry of Power directed gencos to import coal.  The Ministry noted that without imports, widespread power cuts and blackouts would have occurred.

Sources:  Load Generation Balance Report 2022 and 2023, Central Electricity Authority; PRS.

Coal imports rose by about 27 million tonnes in 2022-23.  While this constituted only 5% of the overall coal used in the sector, the price at which it was imported significantly impacted the sector.  In 2021-22, India imported coal at an average price of Rs 8,300 per tonne.   This rose to Rs 12,500 per tonne in 2022-23, a 51% increase.  Coal was primarily imported from Indonesia, and prices shot up due to the Russia-Ukraine war, and demand surge by countries like India and China.   

Sources: Ministry of Power; Ministry of Statistics and Programme Implementation; PRS.

Coal import situation going forward

In January 2023, the Ministry of Power advised gencos to import 6% of the required coal, to ensure sufficient stock until September 2023.   It noted that due to floods and variable rainfall in various parts of the country, hydro generation capacity reduced by about 14%.   This put additional burden on coal based thermal generation in 2023-24.  Following this, in October 2023, the Ministry directed all gencos to continue using at least 6% imported coal until March 2024.  

image

Sources: Ministry of Coal; PRS.

Structural issues in the power sector and its impact on state finances

Discoms witness persistent financial losses due to certain structural issues.  Their costs are typically high because of old contracts with generation companies (gencos).  Power purchase costs in these contracts  do not account for production efficiencies over the years, and costs remain unchanged.  Tariffs are only revised every few years, to ensure that consumers are protected from supply chain shocks.  As a result, costs are carried forward for a few years.  In addition, discoms sell electricity to certain consumers such as agricultural and residential consumers, below cost.  This is supposed to primarily be recovered through subsidy grants provided by state governments.  However, states often delay subsidy payments leading to cash flow issues, and accumulation of debt.  In addition, tariff recovery from the power sold is not optimal.  

Losses reported in the generation sector have also increased.  In 2022-23, state-owned gencos reported losses worth Rs 7,175 crore, as compared to the Rs 4,245 crore in 2021-22.  Rajasthan accounted for 87% of these, at Rs 6,278 crore.  Note that under the Late Payment Surcharge Rules, 2022, discoms are required to make upfront payments to gencos.  

Risk to state finances

Persistent financial losses, high debt and guarantees extended by states continue to pose a risk to state finances.  These are contingent liabilities for state governments, i.e., in the event a discom is unable to repay its debt, the state would have to take it over.  

Several such schemes have been introduced in the past to bail discoms out (See Table 2).  As of 2022-23, discoms have an outstanding debt worth Rs 6.61 lakh crore, 2.4% of the national GDP.  Debt is significantly high in states such as Tamil Nadu (6% of GSDP), Rajasthan (6% of GSDP), and Uttar Pradesh (3% of GSDP).  Previous Finance Commissions have recognised that strengthening discom finances is key in minimising the risk to state finances.    

Table 2: Key government schemes for the turnaround of the distribution sector over the years

Year

Scheme

Details

2002

Bailout Package

States take over the debt of state electricity boards worth Rs 35,000 crore, 50% waiver of interest payable by state electricity boards to central PSUs

2012

Financial Restructuring Package

States take over 50% of the outstanding short-term liabilities worth Rs 56,908 crore

2015

Ujwal Discom Assurance Yojana (UDAY)

States take over 75% of the debt of discoms worth Rs 2.3 lakh crore and also provide grants for any future losses

2020

Liquidity Infusion Scheme

Discoms get loans worth Rs 1.35 lakh crore from Power Finance Corporation and REC Limited to settle outstanding dues of generators, state governments provide guarantee

2022

Revamped Distribution Sector Scheme

Central government to provide result-linked financial assistance worth Rs 97,631 crore for strengthening of supply infrastructure

Sources: NITI Aayog, Press Releases of the Ministry of Power; PRS.

For more details on the impact of discom finances on state finances, see here.  For more details on structural issues in the power distribution sector, see here.  
 

ANNEXURE

Table 3: Cost and revenue structure of discoms on energy sold basis (in Rs per kw)

Details

2019-20

2020-21

2021-22

2022-23

Average cost of supplying power (ACS)

7.4

7.7

7.6

8.6

    of which

       

    Cost of procuring power 

5.8

5.9

5.8

6.6

Average revenue realised (ARR)

6.8

7.1

7.3

7.8

    of which

       

    Revenue from sale of power

5.0

4.9

5.1

5.5

    Tariff subsidy

1.3

1.4

1.4

1.5

       Regulatory income and revenue grant under UDAY

0.3

0.1

0.0

0.2

Per unit loss

0.6

0.6

0.3

0.7

Total financial losses

-60,231

-76,899

-16,579

-68,832

Sources: Power Finance Corporation reports for various years; PRS.

Table 4: State-wise profit/loss of power distribution companies (in Rs crore)

State/UT

2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

Andaman and Nicobar Islands

-605

-645

-678

-757

-86

-76

Andhra Pradesh

-546

-16,831

1,103

-6,894

-2,595

1,211

Arunachal Pradesh

-429

-420

NA

NA

NA

NA

Assam

-259

311

1,141

-107

357

-800

Bihar

-1,872

-1,845

-2,913

-2,966

-2,546

-10

Chandigarh

321

131

59

79

-101

NA

Chhattisgarh

-739

-814

-571

-713

-807

-1,015

Dadra & Nagar Haveli and Daman & Diu

312

-149

-125

NA

NA

NA

Delhi

NA

NA

NA

98

57

-141

Goa

26

-121

-276

78

117

69

Gujarat

426

184

314

429

371

147

Haryana

412

281

331

637

849

975

Himachal Pradesh

-44

132

43

-153

-141

-1,340

Jharkhand

-212

-730

-1,111

-2,556

-1,721

-3,545

Karnataka

-2,439

-4,889

-2,501

-5,382

4,719

-2,414

Kerala

-784

-135

-270

-483

98

-1,022

Ladakh

NA

NA

NA

NA

-11

-57

Lakshadweep

-98

-120

-115

-117

NA

NA

Madhya Pradesh

-5,802

-9,713

-5,034

-9,884

-2,354

1,842

Maharashtra

-3,927

2,549

-5,011

-7,129

-1,147

-19,846

Manipur

-8

-42

-15

-15

-22

-146

Meghalaya

-287

-202

-443

-101

-157

-193

Mizoram

87

-260

-291

-115

-59

-158

Nagaland

-62

-94

-477

-17

24

33

Puducherry

5

-39

-306

-23

84

-131

Punjab

-2,760

363

-975

49

1,680

-1,375

Rajasthan

-11,314

-12,524

-12,277

-5,994

2,374

-2,024

Sikkim

-29

-3

-179

-34

NA

71

Tamil Nadu

-12,541

-17,186

-16,528

-13,066

-9,130

-9,192

Telangana

-6,697

-9,525

-6,966

-6,686

-831

-11,103

Tripura

28

38

-104

-4

-127

-193

Uttar Pradesh

-5,269

-5,902

-3,866

-10,660

-6,498

-15,512

Uttarakhand

-229

-808

-323

-152

-21

-1,224

West Bengal

-871

-1,171

-1,867

-4,261

1,045

-1,663

State Sector

-56,206

-80,179

-60,231

-76,899

-16,579

-68,832

Dadra & Nagar Haveli and Daman & Diu

NA

NA

NA 

242

148

104

Delhi

109

657

-975

1,876

521

-76

Gujarat 

574

307

612

655

522

627

Odisha 

NA

NA

-842

-853

940

746

Maharashtra 

NA

590

1,696

-375

360

42

Uttar Pradesh 

182

126

172

333

256

212

West Bengal 

658

377

379

398

66

-12

Private Sector

1,523

2,057

1,042

2,276

2,813

1,643

All-India

-54,683

-78,122

-59,189

-77,896

 -13,766 

 -67,189 

Note: Minus sign (-) indicates loss; Dadra & Nagar Haveli and Daman & Diu discom was privatised on April 1, 2022; New Delhi Municipal Council Distribution utility has been added from 2020-21 onwards. 
Sources: Power Finance Corporation reports for various years; PRS.