The government in the next couple of days will announce a major policy for the stressed power sector, which has been reeling under high debt, Finance Minister Arun Jaitley said today.
"Power is a stressed sector. In the next couple of days, we are likely to announce some major policy decisions in that regard to take the sector out of stress. Once that happens, I am quite sure the private sector will also start participating," he said at the National Strategy Day on India, jointly organised by the World Economic Forum and CII.
While Jaitley did not elaborate, it is believed that the Cabinet at its next meeting may consider recasting Rs 4.3 lakh crore of loans of nine power distribution companies subject to states agreeing to raise electricity tariff over a period of time.
"The big problem area for us is the power sector. I think that is an infrastructure issue which we are going to be addressing literally in the next couple of days, if not in the next couple of hours itself. We have almost finalised an approach in that direction," he said.
Jaitley said India is generating more power than it needs. "First time in history, we have surplus resource. The generation companies are in difficulty because there are no takers of power."
While an electricity transmission grid can take the electricity to every part of the country, discoms have now become extremely vulnerable because some of the states are not charging people adequately for user charges.
"It wasn't good politics, but simply bad economics. And those discoms are not in a position to lift that power because of that financial condition. So, unless we are able to revive their health, the whole chain itself will suffer," he said.
Power sector is one area of infrastructure which has remained unaddressed for so many years. "I think it needs to be tackled immediately and our current focus is literally on this area," he said.