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Financial Recast of Distribution Utilities to be Linked with Tariffs: A Move to Push Tariff Hikes?

News

Prime Minister Narendra Modi is to tell states to raise electricity prices in return for access to a financial bailout package, a politically contentious move that risks a backlash from farmers and consumers long used to free or cheap power.

Source:- live mint

SNP Insight

By linking electricity tariffs with financial recast, government is trying to give distribution utilities an added advantage to purchase more power and reduce blackout. Although political interest of regional parties with the sector might act as the roadblock, in the implementation of the plan, but, if implemented distribution utilities shall be able to shed off some financial burden and provide reliable power to the consumers.

Source:- SNP Infra Research