Finance Minister Nirmala Sitharaman on Wednesday announced a special liquidity infusion scheme for the fund starved power distribution sector.
FM said the government will provide Rs 90,000 crore for the distribution companies (discoms) as part of its strategy to bring the country’s battered economy back on track.
This is one of the 15 measures announced by the FM to combat the economic effect of coronavirus pandemic induced lockdown, which has worsened the already precarious finances of these discoms.
Sitharaman addressing the reports at a press conference said “Discoms today are facing unprecedented cash flow problems.”
Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) will infuse the liquidity by raising an amount of about Rs 90,000 crore from the market against the receivables of discoms.
The state governments will provide a guarantee.
This fund will help in clearing the outstanding dues of the power discoms by state-owned financial institutions and will also help them from going bankrupt.
Discom dues to power generating companies (gencos) touched a record Rs 92,000 crore in February.