2020-09-02 / HFE Team
'ATMANIRBHAR’ DISCOMS: WAY FORWARD FOR RENEWABLE SECTOR IN INDIA
- During this pandemic, demand of energy in the country has gone down and discoms are facing further reduction in revenue realization. To tide over this crisis, the Central Government has announced a special Rs. 90,000 crores package under Atmanirbhar Bharat. The package although in the right direction, is again grossly inadequate to relieve the financial stress on Discoms, which in any case are facing challenges in servicing debt.
- Credit created by a central bank can be lent at any price, duration and term making loans very affordable or simply given as a grant. These funds can be routed to DISCOMS through a special window of PFC/REC or SBI as cost (2-3% p.a.), long moratorium (10-15 years) and long term loans (30 years) meant for funding capital expenditure of Discoms strictly under make in India
- If infrastructure spending of at least 20-30 lakh crores per annum under Make in India is planned through central bank investment credit, this alone can add 8% to 10% p.a. to the GDP. Supported with contribution from other sectors, India can cross 10% p.a. GDP growth.
Read the entire article in CII's communique for August 2020 - view this pdf [Pg 9-10]
Detailed study on applicability of Investment Credit Economics in Indian Power sector::
THE PROBLEM WITH POWER DISTRIBUTION SECTOR CAN BE RESOLVED THROUGH SPECIAL FUNDING