Check rot in power sector
This is in reference to the report “Lenders tear into power regulator over backlog” (July 22). While the banking sector, more particularly, the public sector banks, are suffering from elevated levels of bad loans, the anticipated potential non-performing assets—to the tune of R3 lakh crore—on account of lending to power sector will further deteriorate the health of lenders, thus needing an immediate intervention by the government. At a time when the government is moving fast with initiatives to improve the ease of doing business in India, and is bent on making India a manufacturing hub, the power sector has a pivotal role to play in economic growth and needs to be rejuvenated to ensure timely and smooth running of all projects. Besides, any lackadaisical approach to solving the power sector’s problems will dissuade investors from investing in it, leading to an adverse impact on growth and development and will go against the intent of the government. The Central Electricity Regulatory Commission and the Appellate Tribunal for Electricity need to look at avoiding inordinate delays in disposing cases pertaining to various issues including tariffs, which is adversely impacting the developers’ debt servicing capacity. and the very viability of projects. At this juncture, the government must look for implementing appropriate measures to avoid the near-inevitable negative impact on developers and lenders as well.
VSK Pillai, Kottayam