Power subsidies should be on states’ balance sheets: Scindia
2 Aug 2013 10:55 PM GMT
In a strong message to states, Minister of State for Power (Independent Charge) Jyotiraditya Scindia said on Thursday that they should take
the liability of electricity subsidies on their balance sheets instead of burdening the distribution companies. His comments come against the backdrop of many state-run electricity distribution companies (discoms) grappling with precarious financial health.
'We (Power Ministry) do not have any problem if you (states) are giving (electricity) subsidy to any category of consumers. 'However, do not put that liability on the balance sheet of power distribution companies (discoms). It should be funded by you (states) on your sovereign balance sheets,' Scindia said. The central government is working on a financial restructuring package for discoms and the plan include converting part of the discom's debt burden into bonds by respective state governments.
The liabilities of discoms are estimated to be more than Rs 2 lakh crore. Four states- Tamil Nadu, Uttar Pradesh, Haryana and Rajasthan- have completed the financial restructuring of their discoms.
Scindia also urged the power utilities to restrain from stopping electricity supply to consumers even when electricity is available at reasonable costs from other sources.
'We must move away from such abhorrent practices that leave vast number of consumers in energy poverty,' he noted.
In recent times, many states have faced long hours of load shedding even while electricity was available from other sources.The minister was speaking at a conference on Ten Years of the Electricity Act 2003: A Critical Review organised by industry body Ficci.
Meanwhile, the high level advisory panel headed by Power Minister Jyotiraditya Scindia, which is looking into various problems faced by the sector, will meet on 14 August.
The committee, which has so far met seven times, would discuss ‘futuristic amendments’ in the Electricity Act, Scindia said on Thursday.
‘The panel has a clear agenda. We are looking at different pieces of the puzzle of the power sector. The next meeting is on 14 August,’ he told reporters on the sidelines of a conference organised by industry body Ficci.
The advisory panel has discussed various issues related to coal, gas, hydro power and transmission, among others. Members of the committee include Tata group’s Cyrus Mistry, Reliance Power’s Anil Ambani, State Bank of India (SBI) Chairman Pratip Chaudri and ICICI Bank chief Chanda Kochhar.
Meanwhile, Scindia said the Empowered Group of Ministries (EGoM) would meet next week to discuss the Standard Bidding Documents (SBDs) for Case II power projects. ‘We are looking for EGoM approval next week... Case I bidding documents is still work in progress. I intend to get it out within the next month,’ he said.
the liability of electricity subsidies on their balance sheets instead of burdening the distribution companies. His comments come against the backdrop of many state-run electricity distribution companies (discoms) grappling with precarious financial health.
'We (Power Ministry) do not have any problem if you (states) are giving (electricity) subsidy to any category of consumers. 'However, do not put that liability on the balance sheet of power distribution companies (discoms). It should be funded by you (states) on your sovereign balance sheets,' Scindia said. The central government is working on a financial restructuring package for discoms and the plan include converting part of the discom's debt burden into bonds by respective state governments.
The liabilities of discoms are estimated to be more than Rs 2 lakh crore. Four states- Tamil Nadu, Uttar Pradesh, Haryana and Rajasthan- have completed the financial restructuring of their discoms.
Scindia also urged the power utilities to restrain from stopping electricity supply to consumers even when electricity is available at reasonable costs from other sources.
'We must move away from such abhorrent practices that leave vast number of consumers in energy poverty,' he noted.
In recent times, many states have faced long hours of load shedding even while electricity was available from other sources.The minister was speaking at a conference on Ten Years of the Electricity Act 2003: A Critical Review organised by industry body Ficci.
Meanwhile, the high level advisory panel headed by Power Minister Jyotiraditya Scindia, which is looking into various problems faced by the sector, will meet on 14 August.
The committee, which has so far met seven times, would discuss ‘futuristic amendments’ in the Electricity Act, Scindia said on Thursday.
‘The panel has a clear agenda. We are looking at different pieces of the puzzle of the power sector. The next meeting is on 14 August,’ he told reporters on the sidelines of a conference organised by industry body Ficci.
The advisory panel has discussed various issues related to coal, gas, hydro power and transmission, among others. Members of the committee include Tata group’s Cyrus Mistry, Reliance Power’s Anil Ambani, State Bank of India (SBI) Chairman Pratip Chaudri and ICICI Bank chief Chanda Kochhar.
Meanwhile, Scindia said the Empowered Group of Ministries (EGoM) would meet next week to discuss the Standard Bidding Documents (SBDs) for Case II power projects. ‘We are looking for EGoM approval next week... Case I bidding documents is still work in progress. I intend to get it out within the next month,’ he said.
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