The debt ridden state electricity distribution companies have more trouble in store. Many banks are set to stop lending to loss making distribution companies. Some banks are even considering putting limits on their exposure to these companies. Banks are estimated to have lent a total of Rs 1 lakh crore to different state electricity distribution companies.
Speaking to CNBC-TV18 on the implications of the move, Suresh Prabhu, former power minister during the NDA regime, said that the problem with sub-transmission distribution is where the maximum value addition takes place. So almost 85-90% of the value addition to the power channel already happened and then you lose money at a sub-transmission and distribution end, which is a serious issue according to him.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
