New Delhi: The fiscal health of Uttar Pradesh, Bihar, Madhya Pradesh, Tamil Nadu and Rajasthan is getting worse due to continuous losses incurred by the State Electricity Boards (SEBs), said the rating agency Fitch here on Monday.

Releasing the report, Fitch ratings India Director Devendra Kumar Pant said, “Bihar, UP, Rajasthan, Madhya Pradesh and Tamil Nadu are incurring maximum losses due to their loss making SEBs. These states are finding it difficult to manage their financial resources as per the target fixed by the 13th Finance Commission.”

“The SEBs have suffered heavily because they supply electricity to farmers at subsidized rates, besides during elections power are supplied by purchasing it at market rates further worsened their situation,” Pant added.

This scenario can be gauzed from the fact that Rajasthan revised its power tariff after eight years. This was the reason that it had to witness 4 percent of its Gross Domestic Product (GDP) loss due to power sector which is maximum in the country.

The financially sound states like Haryana, TN and Andhra Pradesh somehow managed to bear the losses, but UP, Bihar, Rajasthan and MP are unable to manage it.

In selling electricity directly to the consumers, the SEBs have incurred losses from Rs 13,860 crore in 2007 to whopping Rs 44, 470 crore in 2010.

Out of total losses sustained by the SEBs, the share of states of UP, Bihar, Rajasthan, MP and TN is 71 percent.

As per the rating report, some state electricity regularity commissions tried to revise the tariff rates, but the exercise failed to improve the SEB’s financial health.

JPN/Bureau