ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Power Tariff Scam Gets Bigger at Rs 50,000 crore

Did Adani and Essar Group Over-Invoice Power Plant Equipment?

The dimension of the scam relating to inflation of power tariffs by, among other things, over-invoicing imported coal has become considerably bigger. It has now come to light that electricity generating companies are seeking to obtain compensatory tariffs from regulators. In addition, particular firms in the Adani and Essar Groups, have allegedly over-invoiced imports of equipment. The total size of the scam is currently estimated at Rs 50,000 crore, if not more.  

 

The author would like to acknowledge Abir Dasgupta for writing and research assistance.

 

The scale and scope of the scandal relating to the fraudulent inflation of power tariffs by over-invoicing coal imported from Indonesia, and passing on the costs to the consumer has acquired new dimensions (Guha Thakurta and Malik 2016). Over and above the investigations that are being carried out by the Directorate of Revenue Intelligence (DRI) in the Ministry of Finance on 40-odd companies for allegedly over-invoicing coal imported from Indonesia to the tune of Rs 29,000 crore, there have been certain unrelated developments.

Mundra Power Plant, Kutch, Gujarat, owned by an Adani Group company. Courtesy: Nizil Shah, from Wikimedia Commons. 

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