Power sector revival: Interim Finance Minister Piyush Goyal will meet Power Minister R K Singh and other officials to discuss the issue in the power sector today. The meeting has been scheduled following the Allahabad High Court order that stayed Reserve Bank of India’s February 12 order and asked the ministry to hold a meeting.
The finance minister and the power minister will discuss the issue of NPAs (non-performing assets) in the power sector and the shortage of coal supplies, ET Now reported. Last week, Piyush Goyal had met several public sector banks and discussed ways to resolve the banking crisis on account of high NPAs.
Banks were staring at Rs 2.6 lakh crore ($38 billion), should the power sector NPAs have gone resolution under RBI’s February framework with a strict timeline, a Bank of America-Merrill Lynch report said in April. The Narendra Modi government said that Rural Electrification Corp under the Power Ministry is working on a scheme, SAMADHAN to resolve the crisis.
Under SAMADHAN (Scheme of Asset Management and Debt Change Structure, or Samadhan), the bankers’ consortium shortlisted 11 power plants with an overall capacity of over 12 GW, which are either complete or nearing completion. The scheme is similar to what the SBI-led group of bankers came out with to takeover unsustainable debt of stressed power plants to avoid their liquidation.
Meanwhile, some private power companies lately alleged that there was a shortage of coal supplies, which the Coal India rejected. On May 24, Coal Ministry said there may be an increased demand for coal due to a surge in demand during peak summer. The government has asked Coal India to make out-of-turn allotment of scarce coal to central and state electricity generation companies.