The government is likely to enhance the liquidity package for distribution utilities to Rs 1.25 lakh crore from Rs 90,000 crore announced in May, according to a source.
The liquidity package announced by Finance Minister Nirmala Sitharaman as part of more than Rs 20 lakh crore stimulus for COVID-19-hit economy, would be extended for payment of outstanding dues by two months till May 2020.
Initially, the package was for granting loans by Power Finance Corporation and REC Ltd to discoms for payment of their dues till March 2020.
"Ministry of Power has firmed up a proposal to hike the Rs 90,000 crore liquidity package for discoms to Rs 1.25 lakh crore," a source privy to the development said.
Earlier in the day, Power Minister R K Singh in a virtual conference with state energy ministers said that the period of outstanding dues would be extended till May 2020 as against March 2020 under the liquidity package.
He said that the states have requested for a hike in the liquidity package and extension of period outstanding dues by few more months due to the impact of COVID-19 induced lockdown.
He also told that states have asked for Rs 93,000 crore loans under the package and Rs 20,000 crore has been sanctioned so far.
At the time of announcing the package in May, Sitharaman had told that state discoms dues were Rs 94,000 crore. Bearing the brunt of lockdown, the discoms outstanding has swollen further.
According to latest update on the PRAAPTI portal, the discoms outstanding dues were Rs 1,25,958 crore as of May 2020, which includes overdue amount of Rs 1,14,013 crore.
The outstanding dues becomes overdue after non-payment for over 60 days. Gencos charge penal interest on this amount.
The PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators) portal was launched in May 2018 to bring in transparency in power purchase transactions between the generators and discoms.
Singh during the state energy ministers' conference, said, "We are planning to launch a new variant on KUSUM Scheme in which the feeder to the agriculture sector will be solarised. It will eliminate the burden of subsidy on state governments which they give in irrigation in the next 3-4 years."
During a press briefing on the state ministers conference, he clarified that the government has already extended the deadline for installing emissions control (FGD) equipment.
There were concerns that after tightening imports norms for Prior Reference countries mainly China, the power gencos would not be able to install the emission equipment required to meet environment norms soon.
The state ministers also put up their view points on Electricity Amendment Bill 2020 during the conference.