Despite continuous infusion of funds by way of loans from PFC-REC, power distribution companies (discoms) in Uttar Pradesh are in a precarious financial position, mainly due to inadequate revenue collection. The cumulative cash gap of the five discoms in the state from April to September has burgeoned to approximately Rs 13,000 crore, owing to which the Uttar Pradesh Power Corporation (UPPCL) is unable to make timely payments to generators supplying power to the state

UPPCL’s cash gap for the first six months of 2020-21 was Rs 12,000 crore. Dues to generating companies, including state-run generators, have shot up to over Rs 17,000 crore. While the dues to CPSUs stand at Rs 2,200 crore, dues to independent power producers stand at Rs 6,000 crore and those to Uttar Pradesh Rajya Utpadan Nigam (state generating company) are at Rs 9,000 crore