Cabinet offers relief to struggling power firms
NEW DELHI: New Delhi: The union cabinet has allowed power producers, saddled with ₹36,000 crore of unpaid dues, to end supply contracts with defaulting power distribution companies (discoms), as Prime Minister Narendra Modi’s government, in possibly its last cabinet meeting, addressed a pressing concern for the industry.
On Thursday, the Cabinet Committee on Economic Affairs approved recommendations made by a ministerial panel that allowed power generators to retain coal allocations linked to a supply contract even if the agreement is terminated because of payment defaults by power discoms.
The cabinet also cleared a new hydropower policy aimed at making purchase of electricity from such projects mandatory and offered financial incentives to make hydropower tariffs competitive with those using rival fuel sources.
