The ₹90,000 crore package would provide only a temporary relief to power distribution companies but not long-term stability, India Ratings and Research (Ind-Ra) said on Tuesday.
Finance Minister Nirmala Sitharaman earlier this month announced ₹90,000 crore liquidity infusion for discoms, saying that they owe ₹94,000 crore to power generation companies.
“India Ratings and Research (Ind-Ra) believes that the bailout package of ₹900 billion would only provide a temporary relief to power distribution companies (discoms),” Ind-Ra said in a statement.
The loans will be provided to discoms against guarantees by state governments and will be used to clear their liabilities towards central public sector enterprise generating and transmission companies (gencos/transcos), independent power producers and renewable energy gencos.
However, this benefit has not been extended to discoms for payables towards state gencos.