Prime Minister Narendra Modi on Friday huddled with key ministers to review the impact of the pandemic on the power and aviation sectors and firm up strategies to usher in long-term reforms, even as the government extended the lockdown by two weeks from May 3. Measures for improving the viability of state-owned power distribution companies (discoms), including tariff rationalisation and timely release of subsidies, were also discussed at the meeting.
To help the aviation sector, among the worst-hit segments of the economy, it was decided that the country’s air space should be used in such a manner that flying time gets reduced, benefitting travellers and also helping the airlines save costs, in close cooperation with the Department of Military Affairs. According to an official statement, the civil aviation ministry has been directed to speed up the process of handing over six more airports on the public-private-partnership basis by initiating the tender process within three months.
The Prime Minister on Thursday held a series of meetings on various sectors – coal, mining, defence and aero space – with the focus on wooing foreign investments and tiding over the Covid-19 outbreak. The meetings were attended by home minister Amit Shah, finance minister Nirmala Sitharaman, minister of state for finance Anurag Thakur and senior officials of the relevant departments. Civil aviation minister Hardeep Singh Puri and power minister RK Singh participated in the meetings related to their sectors.
As for the power sector, financial positions of the discoms are expected to only exacerbate in times of lockdown due to a drop in demand from industrial and commercial customers, which account for roughly 70% of revenue of the discoms. Logistical constraints for revenue collection have made the matter worse. These are raising risks of a delay in payments to power generators. Overdues ? payment default of 60 days or more ? from discoms to power producers were already at Rs 79,829 crore at March-end. The current crisis is seen to aggravate financial losses of discoms to Rs 50,000 crore in FY21 (from estimated Rs 30,000 crore in FY20), according to an estimate by rating agency ICRA.
Other important issues, such as the propagation of renewables, flexibility in coal supply and enforcement of contracts for attracting private investment in the sector were also discussed in the meeting.
In the aviation sector, the e-DGCA project was reviewed. The project is touted to bring in more transparency in the DGCA’s office and help stakeholders by reducing the processing time for various licences/permissions. It was also decided that all reform initiatives taken by the civil aviation ministry and the organisations under it should proceed in a time-bound manner.