Financial package for power discoms coming soon

India's power distribution companies (discoms) could get a lifeline as early as this week.

Citing sources, CNBC-TV18 reports that the cabinet will take up a proposal to restructure their debt tomorrow, adding that the headroom under the Fiscal Responsibility and Budget Management (FRBM) scheme will be put to use and old loans will be converted into bonds.

This move could reduce interest costs by at least 3 to 5 per cent and interest outgo will come down by as much as Rs15,000 crore per annum.

Meanwhile, in an interview with the TV channel, power and coal minister Piyush Goyal said a final resolution for power generators and distributors is on the anvil.

''The states are on board, the coal companies, the power generating units, transmission companies, all have worked together to find a permanent resolution. The big difference between the past and now is that (a) it is not foisted on the states on the top (b) it is not driven by subsidies.''

He further said, ''It is not as if we are doling out or promising to dole out money but it is about hand-holding the states, it is about empowering them to be able to give electricity to everybody in their state 24/7. It is about helping them with technology, helping them to upgrade their transmission and distribution systems. So this time around it's a completely new programme.

''We are also looking at it in the long run to make sure that in the future there is no incentive to keep these discoms in losses and I am confident that given the bipartisan support of all parties towards this programme, it strengthens my resolve to be able to give 24/7 power to everybody in this country.''

On the issue of discoms getting out of the red, he said, ''Some of them will get out of annual losses in 12 to 18 months. It will depend from state to state. However, from the Centre, some of our officials are sitting down with the state government team in a partnership model. We are not micro managing their work but we are helping them evolve their own project plans for the next three-four years. Come 2019, I feel India will have zero loss of the discoms on an annual basis.''