Central govt plans to tighten the screws on debt-ridden discoms

NEW DELHI : The Union government is working on reforms to instil financial discipline at state-owned electricity distribution companies (discoms), including mandatory timely audits of accounts to be eligible for central funds and grants, power minister Raj Kumar Singh said.

The National Democratic Alliance (NDA) government also plans to tighten prudential lending norms of public sector lenders Power Finance Corp. Ltd (PFC) and Rural Electrification Corp. Ltd (REC) and bring them on a par with banks and financial institutions. This move aims to incentivize discoms to control their spiralling losses to retain their access to funds, given that these lending giants have $80 billion by assets and are the largest lenders to the power sector.