Multiple conditions on discoms-THE HINDU-18-05-2020


Called the ‘Special Long Term Transition Loan to Discoms for COVID-19', the financial assistance is meant to help the Discoms clear their dues to power producers, both belonging to the Central public sector undertakings and the private sector, and transmission companies.

The Discoms should submit an “unconditional and irrevocable” guarantee from the respective State governments with due approval from the State Finance Departments before the first disbursement.

Awaiting information:

As part of “pre-commitment conditions,” the Discoms should have arrangements for self-assessment by end consumers and digital payment of the bills, apart from installation of “smart” or pre-paid meters at the premises of the government departments and attached offices.

The insistence on “smart” or pre-paid meters is being made so that the Discoms get their dues regularly. As for the State governments, they should have a system by which the Discoms raise their bills for subsidies which should, in turn, be settled upfront every quarter or month.

Execution of pact:

The broad contours of such an agreement include liquidation plans for clearing dues, through three annual instalments, by the State governments towards unpaid bills from their departments, enterprises and local bodies and a plan for settling the unpaid subsidy amount to the Discom/ Discoms. The dues or subsidy paid by the State governments should be used to repay outstanding loan amount to the REC or the PFC in the ratio of loan originally disbursed.

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