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A proposal to provide permanent solution to issues of debt-ridden power distribution companies will be put before the Union Cabinet "very soon", Power Minister Piyush Goyal said today.
Hit by subsidised tariffs, state electricity discoms are facing cash crunch and are incurring annual losses of about Rs 60,000 crore. This is also affecting public sector banks as their bad loans are rising.
The Power Ministry is working on a proposal to deal with over Rs 4 lakh crore loans of power distribution companies with a view to bring down their liabilities.
When asked about the ministry putting the proposal before the Cabinet, the minister said, "Very soon I can say at this juncture. The discussion with all major states facing problems are almost complete. I will meet Madhya Pradesh Chief Minister tomorrow in this regard".
Goyal has several rounds of meetings with different states including Tamil Nadu, Uttar Pradesh, and bankers to sort out the issues relating to burgeoning debt ailing these discoms.
Earlier the UPA government had finalised a financial restructuring plan (FRP) for the discoms. But that did not serve as permanent solution.
About the banks' readiness to take a hit by lower interest rate for these discoms, Goyal said, "I can assure you that every bank has hailed the innovative way in which a permanent resolution to the discom problems has been worked out. Banks are delighted at the entire proposal."
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