The government’s Rs 90,000 crore package will give provide temporary relief to power distribution companies and not long-term stability, said India Ratings and Research (Ind-Ra) on Tuesday.
Finance Nirmala Sitharaman earlier this month announced Rs 90,000 crore liquidity infusion for discoms, saying that they owe Rs 94,000 crore to power generation companies.
“India Ratings and Research (Ind-Ra) believes that the bailout package of Rs 900 billion would only provide temporary relief to power distribution companies (discoms),” Ind-Ra said in a statement.
The loans will be provided to discoms against guarantees by state governments and will be used to clear their liabilities towards central public sector enterprise generating and transmission companies (gencos/transcos), independent power producers and renewable energy gencos.
