Supplyco burdened with debt of Rs 2725 crore

Kottayam: Supplco continues to reel under financial hardship despite the sanction of Rs 200 crore by the government on March 30. The total debt of Supplyco is Rs. 2725 crores as the government owes Rs. 1525 crores as its share and outstanding dues to suppliers (Rs.850 crores) and the share of central government (Rs. 350 crores). 

Now, Supplyco too moves in the direction of KSEB as it finds itself neck deep in debt.  It has expenditures that exceed income and with nominal government assistance, even the sustenance looks difficult. 

If supply of goods is ensured, the daily functions can proceed. The dues owed can be paid off in instalments. But the government has to cover the loss incurred while selling the goods bought at market rates. 

The crisis worsened from 2023 onwards with a major reduction in financial assistance in 2022 . From an average turnover of Rs 15 crore, the revenue has fallen to Rs 2-3 crore. On an average, up to 45 lakh people who were dependent on the outlets have turned away. Now only 10-15 lakh people depend on the outlets.

Rs 350 crores per annum is given by the government for market intervention. But there have been fluctuations in this regard in the last 11 years. Supplyco spent Rs 2789 crore on purchasing goods from FY 2021-22 to FY 2023-24. 

Rs 1694 crore was obtained through sales. Currently the loss is Rs 1094 crore. Only Rs 250 crore was received from the government. Meanwhile, no separate money was allocated for providing Covid kits. With this, a liability of Rs 1525 crore was incurred. 

Out of the Rs 700 crores to be received from the center, Rs 350 crore has been allocated.  

The current scene

Rs 200 crore allocated was distributed to the agencies that delivered the items. 15-25 percent was given to each distributor. Agencies will be willing to distribute items by offering a lower price if the full amount is paid. But, since outstanding arrears is there, they quote high rates while enter into contract with supplyco.