Macro Economy

States seek loans worth ₹91,699 cr to help Discoms clear dues

Twesh Mishra New Delhi | Updated on June 26, 2020

NEW DELHI, 29/06/2017: High tension power lines coming to the NCR in New Delhi. The soaring mercury level has pushed Delhi's power demand to an all-time high, Discoms have estimated this year's peak power demand to cross 6,500-6,600MW. With rising demand, the chances of power failures also go up. Photo: Sushil Kumar Verma   -  THE HINDU

Power Ministry yet to decide on actual disbursal under Atmanirbhar Bharat scheme

The Ministry of Power has said that it has received requests from State governments seeking loans worth ₹91,699 crore for supporting power distribution companies (Discoms). But, according to the Centre’s own estimates, requests for loans worth only ₹9,943 crore are admissible.

Requests for these loans came after the Centre announced that the Power Finance Corporation (PFC) and its subsidiary, REC India, will offer soft loans to help Discoms clear dues. Loans worth around ₹90,000 crore were to be given under the Atmanirbhar Bharat scheme to help clear Discoms’ dues payable to Central PSU(CPSU) power generation companies (Gencos). The scheme was announced last month.

In fact, the total amount sanctioned till now by the Centre stands at ₹2,500 crore. This has been sanctioned against a ₹5,000 crore working capital loan request from Maharashtra. All other loan requests are under earlier stages of approval, according to information available.

Of the total amount sought by Discoms, ₹24,331 crore is in the form of working capital loans and outside the purview of the Atmanirbhar Bharat programme, according to officials in the know.

Formal application awaited

Uttar Pradesh has sought the highest loan amount of ₹21,500 crore, followed by Telangana, which has sought ₹12,000 crore, data shared by the Ministry showed. However, both these loan estimates are based on discussions and the eligibility of a loan amount shall be checked after the formal submission of a loan application.

As of early this week, Telangana’s proposal is under consideration of the State Energy Department while the UP proposal is under consideration of the State Finance Department. The Ministry expects a formal application for these two large loans by the end of June.

Maharashtra, Uttarakhand, Bihar and Tamil Nadu have put in working capital request loans, according to the Power Ministry. Tamil Nadu has sought the highest amount of ₹15,000 crore. Maharashtra has sought ₹5,000 crore, followed by Bihar at ₹3,524 crore and Uttarakhand at ₹807 crore.

Published on June 26, 2020

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