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Changes in Mega Power Policy get Cabinet Approval

<p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The Cabinet Committee on Economic Affairs on Thursday approved two changes in the Mega Power Policy 2009 to benefit more developers.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">To avail the benefits under the scheme, developers will be allowed to tie up 65 percent of the installed capacity through competitive bidding and another 35 percent through regulatory tariff. Earlier, developers were expected to tie up 85 per cent of their installed capacity.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">This is a one&nbsp;time dispensation for 15 projects which are located in the states such as Orissa, Madhya Pradesh and Chhattisgarh that have a mandatory host state power tie-up policy of power purchase agreements under regulated tariff.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">&ldquo;The maximum time period has been extended to 60 months instead of 36 months from the date of import for provisional mega projects (25 projects), for furnishing final mega certificates to tax authorities,&rdquo; said finance minister P Chidambaram after the meeting. The policy envisages fiscal concessions like zero custom duty for import of capital equipment for such projects, benefit to the domestic bidders and income tax benefits. In addition, the income tax holiday regime as per section 80-IA of the income tax Act 1961 can also be availed for taking up mega power projects.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">So far, of the 172 Fuel Supply Agreements as many as 157 have been signed between power producers and Coal India Ltd, which would ensure availability of fuel to power plants to boost power generation in the coming years.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The Union Cabinet also approved a proposal for conversion of perpetual non-cumulative preference shares of three state owned banks to equity- Indian Bank UCO Bank and Vijaya Bank with shares amounting to INR 400 crore, INR 1823 crore and INR 1,200 crore respectively. The first such exercise, this will help the lenders meet Basel III capital requirements.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">It also cleared a policy for land management by large ports that would allow these port authorities to lease out excess land.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The CCEA also approved a $1 billion loan from the World Bank for a project on rural drinking water supply and sanitation in low income states of Assam, Bihar, Jharkhand and Uttar Pradesh over a six year period.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">&ldquo;The project is expected to directly benefit a rural population of about 78 lakh people with improved piped water supply,&rdquo; said an official release.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><strong>Also Through</strong></span></span></span></p> <ul> <li style="text-align: justify;"><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">Conversion of preference shares in Indian Bank, UCO Bank and Vijaya Bank into equity</span></li> <li style="text-align: justify;"><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Policy guidelines for land management by major ports</span></span></span></span></li> <li style="text-align: justify;"><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Power System Development Fund</span></span></span></span></span></span></span></li> <li style="text-align: justify;"><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Indian Leather Development Programme for 12th Plan</span></span></span></span></span></span></span></span></span></span></li> <li style="text-align: justify;"><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Construction of 220kV transmission system from Alusteng to Leh</span></span></span></span></span></span></span></span></span></span></span></span></span></li> <li style="text-align: justify;"><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">World Bank assisted rural drinking water for low-income states</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></li> <li style="text-align: justify;"><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Security for women in public transport under Nirbhaya Fund</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></li> </ul> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>