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CAG Report on Delhi DISCOMs: How much Credible are Regulators?

News:

The three private power distribution companies (discoms) in the capital inflated their dues to be recovered from consumers by almost Rs 8,000 crore, the comptroller and auditor general has said in its report on the discoms and claimed that there is scope for reducing tariffs in the city. 

Source:- ET

SNP Insight:

CAG audit report observes a lot of irregularities on the part of DISCOMs while filing their ARR, determining their Regulatory Assests and scheduling the power, resulting into inflated RA and hence increased tariffs. This raises question on the credibility of the Regulatory Commission which is responsible to check for various filings done for the DISCOMs, further it also envisages the need of some policy shifts for procuring power from the generating source. As of now the report paves way for reduction in the consumer tariff, justifying the need of CAG audit for DISCOMs.   

Source:- SNP Infra Research