Budget 2020 likely to open power distribution for private players significantly

The government is likely to make “mega announcements” around electricity distribution in the upcoming budget presentation including opening the distribution space for major private sector investments, according to Jinal Mehta, MD of Torrent Power. Finance Minister Nirmala Sitharaman is set to present her second budget on February 1.

“We expect that the budget would contain some mega announcements around the distribution sector. We expect that the government would provide opportunities for private sector investment in distribution sector. We also expect that the government would address some of the key issues surrounding renewable power capacities such as power evacuation issues, land problems and the issues around the delay in payments by state distribution companies (DISCOMS),” said Mehta in an interview with CNBC-TV18.

Mehta expects the stressed gas-based capacities in the country to be revived through a policy intervention and hopes that at some point in the near future, electricity and gas would be brought under the ambit of Goods and Services Tax (GST).

“We expect that government through the National Tariff Policy (NTP) would force state DISCOMS to adopt institutional reforms, which would include privatisation of some less performing DISCOMS within their areas.

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