Govt Forms Gom on Financial Viability Of Discoms

03 Feb 2025 CW Team

The Government has formed a Group of Ministers (GoM), chaired by Minister of State for Power Shripad Yesso Naik, for addressing issues related to viability of distribution utilities.

The first meeting of the GoM was held, in which it was decided that innovative and out-of-the-box solutions would be explored to steer the distribution sector on the path of financial viability. Besides, it was agreed to convene further meetings in the member States. The seven-member panel includes the Energy Minister of Uttar Pradesh as the member-cum-convenor. The other members include Energy Ministers of Andhra Pradesh, Rajasthan, Tamil Nadu, Madhya Pradesh and Maharashtra.

The GoM will submit its report in three months. Under its terms of reference (ToR), the panel will analyse debt scenarios in key States and identify parameters that need to be monitored to ensure borrowings are productive.

They will also identify States that are in urgent need for liquidity support and design a fiscal discipline programme to enable them to avoid a debt trap. The GoM will recommend guidelines for investment plan with respect to capital expenditure targeted at overall improvement – ensure adequate technical and financial due-diligence, equity investment by State Government, suitable mechanism for realizsation through tariff.

It will also suggest measures for improvement in the overall health of the distribution sector to attract further investment from private participants in the value chain.

Infrastructure Transport

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