Under the Atmanirbhar Bharat Abhiyan scheme unveiled in May, Finance Minister Nirmala Sitharaman had promised a special loan of Rs 90,000 crore to fledgling power distribution companies (discoms) to enable them to clear their dues to independent power producers (IPPs) and generators in the public sector viz. National Thermal Power Corporation (NTPC) and so on, subject to their implementing certain reforms. The Government is now keen on hiking the loan amount to Rs 1,25,000 crore and relaxing reform conditions.
This is not the first time that discoms are in dire financial straits and the Government has bailed them out, subject to their implementing reforms. Since 2000, three such bailouts were granted, the latest being in 2015 under the Ujwal Discom Assurance Yojana (UDAY) which condoned their whopping debt of about Rs 4,00,000 crore. Each time, a promise was extracted from them and their owners (State Government) for carrying out reforms, only to be flouted with impunity.