With initial gains for power entities, cash shortage gradually resulted in inability to pay machinery rents to non-payment of wages in cash to daily laborers and tractor owners which further delayed the projects.

February 7, 2017

As on December 31, progress at projects that involved construction of nearly 2,000 circuit km of transmission lines, pooling stations, sub-stations and switching stations were hit by demonetization. These include power transmission projects across Chhattisgarh, Madhya Pradesh, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu, Himachal Pradesh and Haryana. At the end of November 30, projects that involved nearly 1,400 circuit km of transmission lines cited demonetization as one of their constraints. To be sure, in many of the above projects, other factors such as regulatory clearances and non-availability of raw materials were also cited as constraints, apart from demonetization.

The site activities had been greatly hampered due to non-availability of higher denomination notes i.e. Rs. 500 and Rs. 1,000 since November 9, the CEA report said. However, industry sources said that compared with the usual delays arising from procuring environmental clearances and rights of way in such projects, the hold-up owing to demonetization should be less impactful going forward, as cash availability has improved of late. Finding an avenue to get rid of the old notes, many consumers paid their pending electricity bills through them due to which collections of power distribution firms rose by more than Rs. 3,000 Crore from November December 10 to 15, 2016.