RBI eases discoms’ debt recast; UP to go for privatisation
Power distributors in Uttar Pradesh, Rajasthan and Haryana — which together account for 44% or R84,220 crore of outstanding liabilities of all discoms — had entered into bilateral debt recast schemes with lenders last year and the restructuring had just begun. Under RBI rules, if the failure of one debt recast programme is followed by another one, the assets must be declared as NPAs. The RBI wants to avoid this situation and so recommended suspension of the incipient restructuring without any definite reform obligation on the discoms, official sources told FE.
Meanwhile, the Uttar Pradesh Cabinet on Wednesday gave an in-principle approval for restructuring its bleeding power sector — the state’s discoms have accumulated losses of R42,700 crore — by agreeing to the Centre’s restructuring package. The package makes it mandatory for all loss-making discoms to agree to privatisation, annual increases in tariffs to bridge the gap between input cost and revenue realisation and cutting down AT&C losses. The state government will soon dispatch its acceptance letter to the Centre, an official source said in Lucknow.
According to finance ministry sources, the central bank recently
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