Sector reforms ripple out across the entire economy, but states continue to avoid them. Discoms at the end of July ran up overdues of Rs 1.13 lakh crore to companies generating electricity. These dues have a cascading impact. Generating companies struggle to meet their financial obligations and the entire ecosystem struggles to honour its commitments on time. The nub of the matter in discom overdues is not subsidies. GoI 2016 tariff policy allows crosssubsidies as long as tariffs are within a 20% band around the average cost of supply. Moreover, the Electricity Act allows states to subsidise consumers provided they meet one essential condition: Discoms need to receive the subsidy in advance. If the law is followed, there will be no overdues. Tamil Nadu, Maharashtra, Telangana, UP and J K are among states and UTs with large overdues. The overdue doesn necessarily reflect distribution efficiency. For example, TN aggregate technical and commercial losses are 15% of the billed amount, lower than the national average of 21.8% in 2019-20. Overdues, therefore, are a measure of states shifting their expenses to unrelated entities such as electricity generating companies. This situation is both unfair and untenable. It in this spirit that Modi call for a joint effort at finding a solution must be viewed. It a fiscal problem, not one stemming from partisan politics. Governments at the Centre over the last two decades have made unsuccessful attempts at solving the power payments problem. There are two practical steps. Tariffs are fixed by state regulatory authorities. There a statutory law to notify a road map to bring tariffs within 20% of the average cost of supply. Regulators need to follow the law. In addition, all states need to follow the examples of Kerala and HP, among others, which are trying a switch to direct transfer of electricity subsidy to the consumer. DBT can end a regime of cross-subsidy that leads to delayed payments. Discom reforms need to start right away. Maharashtra governor BS Koshyari remarks on Rajasthanis and Gujaratis and Mumbai financial power manage to be both utterly wrong and entirely not in keeping with the ethos of the office he occupies. Sector reforms ripple out across the entire economy, but states continue to avoid them. Discoms at the end of July ran up overdues of Rs 1.13 lakh crore to companies generating electricity. These dues have a cascading impact. Generating companies struggle to meet their financial obligations and the entire ecosystem struggles to honour its commitments on time. The nub of the matter in discom overdues is not subsidies. GoI 2016 tariff policy allows crosssubsidies as long as tariffs are within a 20% band around the average cost of supply. Moreover, the Electricity Act allows states to subsidise consumers provided they meet one essential condition: Discoms need to receive the subsidy in advance. If the law is followed, there will be no overdues. Tamil Nadu, Maharashtra, Telangana, UP and J K are among states and UTs with large overdues. The overdue doesn necessarily reflect distribution efficiency. For example, TN aggregate technical and commercial losses are 15% of the billed amount, lower than the national average of 21.8% in 2019-20. Overdues, therefore, are a measure of states shifting their expenses to unrelated entities such as electricity generating companies. This situation is both unfair and untenable. It in this spirit that Modi call for a joint effort at finding a solution must be viewed. It a fiscal problem, not one stemming from partisan politics. Governments at the Centre over the last two decades have made unsuccessful attempts at solving the power payments problem. There are two practical steps. Tariffs are fixed by state regulatory authorities. There a statutory law to notify a road map to bring tariffs within 20% of the average cost of supply. Regulators need to follow the law. In addition, all states need to follow the examples of Kerala and HP, among oth