New Delhi: The National Democratic Alliance (NDA) government is exploring a radical plan to help bring financial discipline to state electricity distribution companies (discoms) by limiting state governments’ borrowing.
The move comes against the backdrop of a crisis at discoms due to their poor financial health, which has led to delayed payment to generation utilities. According to the broad contours of the plan, the finance ministry may withhold permission to the state to borrow to the extent of electricity losses not funded by the respective state governments.
“The idea is to make discoms’ borrowing conditional to their performance,” said a senior Union government official, requesting anonymity.
