The Power Finance Corporation has reported that the aggregate technical and commercial (AT and C) losses of discoms have gone up from 20.7 percent in 2019-20 to 22.3 percent in 2020-21. The AT & C estimate gives us an idea of the losses a distribution company (discom) faces in its line of business. In layman's terms, if discom has received 100 units of power, the AT & C figure will tell us how many units are not recovered in terms of revenue. So, a figure of 25 per cent would mean that for every 100 units of power fed into the discom, 25 units are not recovered. Consequently, the discom has to operate with a recovery of only 75 units. Broadly, the losses in the system comprise technical losses and commercial losses, the latter largely implying theft. Some technical losses are inevitable in a distribution system but these can vary a lot across discoms (roughly between 4 to 12 per cent) depending on the technology adopted, the condition of the distribution infrastructure etc. Commercial losses are due to meters not being read, faulty meters, meters being manipulated or bypassed etc. The Indian distribution system has always faced high AT & C losses (in excess of 30 per cent in the early 2000s) which drains the discoms financially and makes then economically unviable.
Given below are two statements:
Statement I: AT and C losses in India have always been more than 30%.
Statement II: A significant contribution to the AT and C losses in India comes from theft of power.
In the light of the above statements, choose the correct answer from the options given below:
Statement I is false but Statement II is true.
This question requires checking both statements individually against what the passage actually says.
Statement I claims AT&C losses in India 'have always been more than 30 per cent.' The passage, however, gives us the current figures: 20.7% in 2019-20 and 22.3% in 2020-21 — both well below 30%. It only mentions the 30%-plus figure in a specific historical context: 'in excess of 30 per cent in the early 2000s.' Saying losses were high 'in the early 2000s' is very different from saying they have 'always' been above 30% — the passage itself gives two clear examples (2019-20 and 2020-21) where losses were well under 30%. So Statement I directly contradicts the passage and is false.
Statement II claims a significant contribution to AT&C losses comes from theft of power. The passage supports this: 'Broadly, the losses in the system comprise technical losses and commercial losses, the latter largely implying theft.' Since commercial losses (which largely mean theft) are described as one of the two main components making up the overall AT&C loss figure, theft is indeed indicated as a significant contributor. So Statement II is true.
Since Statement I is false and Statement II is true, the correct answer is Statement I is false but Statement II is true.
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