Insta
Power distribution lines.
Amidst the Covid-19 pandemic, the central government released a Rs 90,000-crore financial package for the benefit of power distribution companies (discom) across the country.
Reflecting on the advantages of the same, IDBI Bank deputy MD Samuel Joseph Jebaraj told TOI, “Stressed discoms had availed the loans provided by government power financiers and cleared dues to power-generating companies. And the generating companies, in turn, have cleared dues to lenders.”
Apparently, these firms were not repaying their debts in time and were hence categorised as special mention account (SMA).
The funding from the government rolled out through the state-owned Rural Electrification Corporation and Power Finance Corporation aided these companies from creeping into the non-performing asset (NPA) zone.
This scheme is viewed as a temporary solution but the states have to mandatorily undertake reforms that cut down losses due to distribution to avail its monetary benefits.
Power generators owe Rs 1,24,695 crore to state power distribution companies as their collections had decreased significantly during Covid-19 lockdown.
However, discoms have been gradually repaying amounts exceeding their monthly EMI. Thus, the pressure on banks regarding bad loans has dipped and observers say that the financial stress in the sector has considerably eased.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.
Latest