Modi government's Budget 2020 could bring some cheers to the stressed power sector. Industry players are expecting the Centre to announce a scheme akin to UDAY scheme to address issues facing power distribution companies. The government in November 2015 had launched the Ujwal Discom Assurance Yojana (UDAY) to bring about operational and financial turnaround of debt-laden power distribution companies.
Power Minister RK Singh, at the sidelines of the listing ceremony of the $750-million international bond of Power Finance Corporation (PFC) at NSE, recently said an improved version of the UDAY scheme could be launched in this year's budget. "We asked for a new (UDAY) scheme. We had discussions with the Finance Ministry... I am optimistic that the new scheme will find a place in budget," Singh said.
Total outstanding dues owed by distribution companies spiked 45 per cent to Rs 81,085 crore in November 2019 over the same month previous year, reflecting stress in the sector. Discoms owed a total of Rs 54,834 crore to power generation companies in November 2018, PRAAPTI (Payment Ratification and Analysis in Power Procurement for Bringing Transparency in Invoicing of Generators) data shows.
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Among the central public sector power generators, NTPC alone has an overdue amount of Rs 12,483.16 crore on discoms, followed by NLC India at Rs 4,380.22 crore, NHPC at Rs 3,165.11 crore, THDC India at Rs 2,078.30 crore and Damodar Valley Corporation at Rs 936.59 crore. Among private generators, discoms owe the highest overdue of Rs 3,201.68 crore to Adani Power, followed by Bajaj Group-owned Lalitpur Power Generation Company Ltd at Rs 2,212.66 crore and GMR at Rs 1,930.16 crore.
The growth of power generation capacity in India may also be the worst in financial year 2019-20 since 2015-16. Government data shows the total generation growth was only 0.75 per cent up to November, as growth in conventional power generation went down to 0.28 per cent and that of renewable generation fell to 5.21 per cent.
In Budget 2020, there could also be some announcements for the clean energy sector too. While many are expecting some sort of relaxation on GST rates for solar and wind energy equipment, others believe the government should come up with a unique single-window system for address issues facing the sector. "Captive renewable energy policy could be announced with exemption from cross subsidy and transmission charges for clean energy plants beyond factory boundaries," says Care Ratings.
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