The government will provide Rs 90,000 crore for the fund-starved distribution companies (discoms) as part of its strategy to bring the country’s battered economy back on track, Union finance minister Nirmala Sitharaman said on Wednesday.
Nirmala Sitharaman announced this as one of the 15 measures to combat the economic effect of coronavirus pandemic induced lockdown, which has worsened the already precarious finances of these discoms.
“Discoms today are facing unprecedented cash flow problems,” Sitharaman said during a press conference.
This one-time time liquidity infusion will help in clearing the outstanding dues of the power discoms by state-owned financial institutions.
State-owned Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) will infuse the liquidity by raising an amount of about Rs 90,000 crore from the market against the receivables of discoms. The state governments will provide a guarantee.
This will be used to pay the central public sector power generation companies, transmission companies, independent power producers and renewable energy generators.