No easing of norms for debt recast of discoms: Centre
Sources said the ministry has made its stand clear in response to a recent request from the Punjab government seeking more sops for taking over the debts of its discoms. Punjab has asked for a doubling of the financial support promised by the Centre to take half of its discoms’ loans on its own balance sheet. Besides, it also sought upfront payment of the bailout funds from the Centre. “We will tell the state (Punjab) that its demand is not in line with the scheme approved by the cabinet,” P Uma Shankar told FE.
The R1.9-lakh-crore debt recast scheme approved by the Cabinet recently promises 25% capital reimbursement by the Centre after states take over half of the loans from their discoms by issuing special securities.
“The whole purpose of the scheme is to link incentives to discoms’ performance. If the incentive is paid upfront, it will defeat the very purpose of the scheme,” said Shubhranshu Patnaik, senior director, Deloitte Touche India.
Eight states including Uttar Pradesh, Rajasthan, Tamil Nadu and Karnataka have evinced interest in the debt recast facility. Apart from Punjab, no other state has sought any change in debt recast guidelines though progress in implementation of the scheme remains slow as states are yet to sign on the dotted line. So far, only Tamil Nadu has submitted
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