Power utilities need long-term concrete measures to become “Aatmanirbhar”
RK Singh also indicated that unlike earlier practice of having multiple schemes, the Centre would channelise all efforts through one scheme, and states would have to reduce the losses of discoms to get all benefits
Fiscal prudence must guide policy aspirations in infrastructure creation
The government is proposing to build dis-incentives in the form of denying loans and grants for discoms that do not set their house in order and reduce losses.
Garg also talked about how there was a need for a framework to resolve stressed financial entities and that the Financial Resolution and Deposit Insurance (FRDI) Bill, which was dropped last year, should be revisited.
About Rs 30,000 crore of bank guarantees will have to be readied by August 1.
While it is easy to blame discoms, remember that they are also under political pressure to not increase tariffs and turn a blind eye towards theft etc
The Ujwal DISCOM Assurance Yojana (UDAY) was launched in November, 2015 and has completed more than 18 months of operation.
Power minister Piyush Goyal said the government has set a deadline of August 15, 2022 for electrification of all households in the country and May 2018 for the electrification of all villages.
The payment of interest on the bonds taken by the states under the Ujwal DISCOM Assurance Yojana (Uday) in the current year and the farm loan waiver will affect the states’ fiscal deficits.
Despite announcing the UDAY(Utkrisht Double Decker AC Yatri) train more than a year ago, the launch was delayed due to designing issue, he said.
The treatment of UDAY in state budgets is different for separate states. The states that have large amount of debt have made provision in multiple years (like Haryana, Rajasthan), while the states with less amount of debt (like in case of Jharkhand) have made provision in a single year.
The company has lowest stress in the power financing sector compared to its peers, said PV Ramesh, CMD, REC.
The gross non-performing assets of the infrastructure finance companies (IFCs) shot up to 3.4 per cent in September 2016 from 2.8 per cent in March 2016 and 1.6 per cent in September 2015, said the report by ratings agency Icra.
The debt waiver announced by the Uttar Pradesh government will only provide short-term relief to distressed farmers, but will lead to a bad credit culture and also exert pressure on state finances, said a report.
Notwithstanding the somewhat weak performance on operational parameters, improvement in DISCOM finances will be hugely beneficial to the entire power sector.
Mizoram has become the 27th state to join UDAY scheme meant for revival of debt-stressed discoms which will help it get overall benefits of Rs 198 crore during the period of turnaround.
ICRA today said it is expecting debt refinancing by state governments under UDAY scheme will lower the losses of discoms from Rs 67,000 crore in FY2015 to Rs 37,500 crore in FY2017.
Twenty six states are now part of the UDAY scheme, meant for the revival of debt stressed discoms, after Kerala, Arunachal Pradesh and Tripura formally joined the programme.
Power Grid was under pressure on bourses last week as the street factored in lower return on equity (RoE) after the Central Electricity Regulatory Commission (CERC) proposed to reduce regulated RoE for renewables.
REC has inked a pact with Karnataka Power Corp (KPCL) and Bangalore Electricity Supply Company (BESCOM) to extend Rs 39,121 crore financial assistance to the power companies for the next 5 years.
The power distribution utilities in Rajasthan, Haryana, Chhattisgarh and Punjab are among major gainers in lowering their interest cost under UDAY scheme meant for revival of discoms.
"The Government of India and Sikkim signed a memorandum of understanding (MoU) under the Scheme Ujwal Discom Assurance Yojana (UDAY) today, for operational improvement of the state's Power Distribution Department," a power ministry statement said.
In January 2017, India‘s coal imports declined by 22 percent to 14 million tonnes because of lukewarm demand from power generating stations.
"Tamil Nadu government proposes to issue special securities of Rs 14,000 crore, under the Ujjwal Discom Assurance Yojna Scheme (UDAY)," the Reserve Bank said in a notification.