The Government is close to finalizing a Rs 3.5 crore financial assistance package that would be mandated by state power distribution companies with high losses to either privatize operations or appoint distribution franchisees and invest in infrastructure upgrades, Power Minister R K Singh told ET.
The scheme will come with a gross budget support of Rs 1.2 lakh crore over five years will be result-oriented, where the distribution companies will invest first and receive money later, he said.
Singh also said that a group of ministers headed by Home Minister Amit Shah had cleared the National Tariff Policy that would soon be sent to the Union Cabinet for consideration.
The industry is waiting for the policy as a major reform of the stressed power sector, but is opposed by state governments and discomfort on the grounds of clauses such as sanctions for load discharge.
The reforms are coming to an end on the heels of Finance Minister Nirmala Sitharaman, announcing a Rs 90,000 crore liquidity booster package aimed at helping the power sector tide over an unprecedented cash crunch due to a nationwide lockdown to prevent the spread of Covid-19. As per the scheme, two power sector financiers will disburse Rs 90,000 Crore concessional loans to the distribution companies to be used to pay their electricity bills.
