Discoms get 34 pc of amounted sanction under liquidity infusion scheme, so far
- March 24, 2021
State government-owned power distribution companies (discoms) have been disbursed 34 per cent of the total sanctioned amount, so far, under the Liquidity Infusion Scheme, which is part of the AatmaNirbhar Bharat Abhiyan launched on May 13, 2020.
It was informed in Parliament on March 23, 2021, that loans of Rs.1,35,497 crore have been sanctioned so far, and state discoms have been disbursed Rs.46,321 crore, which works out to around 34 per cent of the sanctioned amount.
It may be recalled that the Union government has approved a one-time relaxation to power financing entities PFC and REC to extend loans to discoms to tide over their financial pressures in view of the COVID-19 pandemic.
These loans seek to enable discoms that do not have adequate headroom available under working capital limits of 25 per cent of previous year’s revenues, as imposed under the Ujwal Discoms Assurance Yojana (UDAY), or do not have adequate receivables from state governments.
Liquidity Infusion Scheme: A Background
The Government of India had announced a Liquidity Infusion Scheme as part of AatmaNirbhar Bharat Abhiyan on May 13, 2020, in the backdrop of the outbreak of global pandemic COVID-19 in the country.
Also read:Discom Dues Rise 23.8 Per Cent Year-On-Year In December 2020
Due to the consequent nationwide lockdown, the revenues of discoms nosedived, as people were unable to pay for electricity consumed. Under the scheme, PFC and REC Ltd. have extended special long-term transition loans at concessional rates to discoms against the receivables of the discoms from the State Government in the form of electricity dues and subsidy not disbursed, to enable them to clear their outstanding dues as existed on June 30, 2020 towards Central PSU generation and transmission companies, independent power producers and renewable energy generators.
Helpful intervention
This intervention in turn enabled power generators to pay for coal and meet their operational expenses. This has enabled continuation of uninterrupted power supply throughout the COVID period across the country. Further mitigation of liquidity issues enabled the power sector to cater to highest ever peak demand on 189.395 GW on January 30, 2021, it was informed in Parliament.