Govt to bear Rs 11,000cr subsidy for power in FY15: Sources

The government is likely to bear around Rs 11,000 crore of subsidies for the power sector in FY15. The subsidy burden is likely to rise n the year to come, reports CNBC-TV18's Siddharth Zarabi.

Sources say that a note has been circulated by the Power Ministry for approval of the Cabinet Committee of Economic Affairs (CCEA), which essentially seeks approval for gas price pooling.
From April 1, there will be a new gas price formula that will kick in and as a consequence the additional power that is generated based on gas would have had the cost implications. So, the Power Ministry has proposed that around Rs 11,000 crore in the next financial year and a similar amount the year thereafter be borne as the subsidy for gas price pooling.
This is important because it provides a certain path for all gas based power plants with regards to the additional burden that they will bear and in any case the additional power that is expected in a power starved economy would be roughly 55000 mu. This proposal is likely to come before the CCEA very shortly and that would provide a formal nod of approval for gas price pooling as well as subsidies.