Govt readies discom revival package

The Narendra Modi-led government has started the process of reworking the financial restructuring package for electricity distribution companies (discoms) to strengthen the debt-stricken firms.

Officials in the Ministry of Power recently held discussions with the Rajasthan government and discussions with other states are on.

Though the previous UPA government implemented a debt restructuring plan, only seven states  — Tamil Nadu, Rajasthan, Uttar Pradesh, Haryana, Jharkhand, Bihar and Himachal Pradesh — opted for it, while the rest did not respond, terming it was not attractive.

As per the previous government’s scheme, 50 per cent of the accumulated debt of the discoms till March 2012 could be converted into bonds.

These bonds would be issued to participating lenders, backed by state government guarantees.

The remaining 50 per cent loan will be restructured by providing moratorium on principal and better repayment terms.

Experts, however, said the previous government package was not attractive as it was a mere moratorium of loan repayments.

The Ministry will come out with a new package, an official from the Ministry told Deccan Herald.

Strengthening the discoms and reduce transmission and commercial losses are major issues to be discussed in the two-day state power ministers meeting at Guwahati from April 9.

There is also a proposal before the government to ask central public sector undertakings like NTPC or NHPC to purchase stakes in state discoms to pump in money and introduce professionalism.

The final plan, however, will be unveiled after taking states into confidence.