A new window has opened up for power sector reform with the final report of the 15th Finance Commission (XVFC) for the five years 2021-22 to 2025-26. This recommendation is among those accepted in the Action Taken Report (ATR), tabled by the government in Parliament along with the report. State government borrowing is to be capped at 4% of state domestic product (SDP) for the new fiscal year 2021-22, to be brought down to 3% in two years. In each of the first four years, a borrowing additionality of 0.5% of SDP is on offer, conditional on power-sector reform.<\/p>\n
But there is a problem with that conditional provision. Not with the parameters, which are carefully calibrated, and had already been broadly indicated in the XVFC interim report for 2020-21, in order to give states preparation time of a year. The problem is that the XVFC has introduced an entry-level requirement that all distribution companies (discoms) in the state must have updated and audited accounts for the previous year (2021-22 alone is exempt).<\/p>\n
By itself, that is an excellent qualifying condition. The problem is that most states would not qualify. States unfortunately have an incentive to conceal the true financial picture of discoms.<\/p>\n","protected":false},"excerpt":{"rendered":"
A new window has opened up for power sector reform with the final report of the 15th Finance Commission (XVFC) for the five years 2021-22 to 2025-26. This recommendation is among those accepted in the Action Taken Report (ATR), tabled by the government in Parliament along with the report. State government borrowing is to be capped at 4% of state domestic product (SDP) for the new fiscal year 2021-22, to be brought down to 3% in two years. In each of the first four years, a borrowing additionality of 0.5% of SDP is on offer, conditional on power-sector reform. But […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[139,130,237],"tags":[],"class_list":["post-408853","post","type-post","status-publish","format-standard","hentry","category-live-mint","category-newspapers","category-power-live-mint"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/408853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=408853"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/408853\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=408853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=408853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=408853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}