NEW DELHI : The Union power ministry plans to request the cabinet to consider raising the borrowing limits of debt-laden state electricity distribution companies (discoms) so that they qualify for the ₹1.25 trillion reform-linked loan package, two people aware of the development said.
The circulated draft cabinet note seeks a one-time exemption for the discoms from the conditions laid out for accessing working capital under the Ujwal DISCOM Assurance Yojana (UDAY).
The Union government had announced the liquidity injection into discoms as part of a stimulus package to revive India’s virus-battered economy. The money is to be raised by state-owned Power Finance Corp. and Rural Electrification Corp. from the market against the receivables of discoms.
