White Paper says Tamil Nadu’s power distribution company faces a “persistent monthly structural” cash shortfall

Account subscription benefits alongside Premium Stories, Editorials, Opinions and more. Unlock these with Subscription

The View From India Looking at World Affairs from the Indian perspective.

First Day First Show News and reviews from the world of cinema and streaming.

Today's Cache Your download of the top 5 technology stories of the day.

Data Point Decoding the headlines with facts, figures, and numbers

Health Matters Ramya Kannan writes to you on getting to good health, and staying there

The Hindu On Books Books of the week, reviews, excerpts, new titles and features.

Presenting a grim picture of the financial health of the Tamil Nadu Power Distribution Corporation Limited (TNPDCL), the White Paper on finances of the State government has stated the power utility faces a “persistent monthly structural cash shortfall,” which is independent of the Average Cost of Supply(ACS)-Average Revenue Realised (ARR) position.

A monthly shortfall of ₹2,500 crore translates to an annual liquidity gap of about ₹30,000 crore, financed through a combination of short-term borrowings, delayed payments to power purchase counterparties, and deferred capital expenditure. The shortfall arises in view of the monthly payment obligations for power purchase, debt service and operations. The situation is despite the TNPDCL receiving tariff subsidy and loss-funding grant transfers. , according to the document.

TNPDCL is one of the entities formed after the abolition of the Tamil Nadu Generation and Distribution Company (TANGEDCO) in 2024. The other firms are the Tamil Nadu Power Generation Corporation Limited (TNPGCL) and the Tamil Nadu Green Energy Corporation Limited (TNGECL). The three companies, along with Tamil Nadu Transmission Corporation (TANTRANSCO), form, what is popularly called, the TNEB (Tamil Nadu Electricity Board) group.

Describing the ACS-ARR gap as the “fundamental operating driver” of the TANGEDCO’s losses, the White Paper, released on Tuesday, recalled for seven consecutive years up to 2021-22, power tariff was not revised with the gap rising to ₹1.58 per unit. The introduction of Multi-Year Tariff (MYT) in 2022-23, linked annually to the Consumer Price Index, provided “partial correction.”

The gap had since narrowed down “sharply,” reaching ₹-0.05 per unit in 2024-25 and turning marginally positive (₹0.04/unit) on a provisional basis in 2025-26. However, this was “not owing to the operational efficiency or full recovery of the cost of supply from consumers. On the contrary, despite tariff hikes, there has been little structural improvement in the fi