In line with the recommendations of private electricity producers and the ministry of power, the government on Sunday has decided to set up a high-level empowered committee headed by the cabinet secretary to prevent stressed assets worth Rs 2.5 lakh crore from becoming non-performing assets (NPAs).
Representatives from the ministries of power, coal, finance and railways along with lenders having major exposure to the sector would also be part of the committee. The department of financial services, in its latest report, had acknowledged the fact that the stress is caused by factors cutting across sectors, and recommended that a high-level panel be set up to expeditiously resolve such issues.
The committee would deliberate on the possible changes regarding fuel allocation policy, regulatory framework, provisioning norms in the insolvency and bankruptcy code and asset restructuring company regulations that might be required to salvage the sector, the government said on Sunday.
The finance ministry had said the RBI’s “one-size-fits-all approach” under its February 12 circular may not be the most suitable response to deal with massive stressed assets in the power sector.