The Government needs to find solutions to deal with the stress on power and distribution companies, according to Jayant Sinha, Minister of State for Finance. “Because we’ve made a commitment to the people of India that we’ll provide 24x7 power, I think it is incumbent upon us to find solutions to these issues that are there in power and distribution,” Sinha said at a conference organised by Edelweiss and Wells Fargo.

Bleeding cash Currently, power companies are bleeding cash and have defaulted on their loans. Banks have restructured around ₹53,000 crore of the seven DISCOMs’ exposure under FRP. The moratorium period for repayment of the principal amounting to ₹43,000 crore has ended by March-2015, as per a RBI report. Highlighting that the Government is familiar with the issues of distribution companies, Sinha said historically these problems have been dealt with through various means between the State government, RBI and the Centre.

“There have been tri-partite agreements,” he said.

Speaking about alternative financing to fund houses, Sinha said the Centre is working hard to secure new avenues of financing for roads, railways and power sector.

In his visits overseas, Sinha said Canada, Australia, Japan and West-Asian countries have evinced interest in investing in India. With a goal is to put the country on a trajectory of 7-8 per cent growth rate, Sinha said the government has also taken efforts in the Budget to invest ₹70,000 crore more than last year for public investment.

The government is also enabling companies such as Nabard to issue more infrastructure bonds. It is also in the process of setting up a National Infrastructure Fund to invest ₹20,000 crore each year in high-risk and long gestation period projects.

It is also looking for innovative financing structure for priority sectors such as renewable energy. Sinha also said the government cannot change Dividend Distribution Tax for trusts to set up for infra financing.

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