Sluggish power sector could hit economic growth: India Ratings
Taking over of 50 per cent short term liabilities of discoms by respective state government is a major proposal in the Central government plan.
"The package is voluntary and is currently being worked out by discoms in 10 states namely Rajasthan, Haryana, Uttar Pradesh, Tamil Nadu, Andhra Pradesh, Punjab, Karnataka, Jharkhand, Himachal Pradesh and Kerala," the report said.
India Ratings also noted that if the discoms are unable to achieve operational efficiencies, the package would only have successfully deferred the problems and not resolved them.
Meanwhile, the report said that merchant tariffs might rise due to "high deficits in energy and power, low Plant Load Factors (PLFs) for available capacities due to fuel shortages, low capacity addition, high fuel prices and increasing percentage of imported coal in overall coal supply".