Finance Minister Nirmala Sitharaman announced a liquidity infusion of ₹90,000 crore in power distribution companies (Discoms), the profits of which have plummeted in the recent past.
Making the announcement on Wednesday (May 13) as part of the first tranche of the economic rejuvenation package announced by Prime Minister Narendra Modi a day ahead, she said the Discoms faced an unprecedented ‘cash flow issue.’ The FM noted that the cash crunch was accentuated by a slump in demand.
Putting the trouble the Discoms faced in perspective, the FM said the ‘Discom payables’ to power generation and transmission companies came to ₹90,000 crore (approx).
The liquidity infusion will be done by Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC), a document put out by the Union Government titled ‘Atmanirbhar Bharat’ (Self-reliant India) said.
The Finance Minister said loans would be given against state guarantees to discharge the liabilities of Discoms to generation companies.
On the reforms front, the FM said Discoms would enable digital payment facilities to consumers. Specific plans would be made to lessen operational and financial losses.
Also, the Central power generation companies would provide rebates to Discoms which would be passed on to consumers (industries).