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Grant of 1 Lakh crore poised to improve performance parameters

Government’s new scheme to grant over Rs 1.1 lakh crore to state power distribution companies (discoms) is a positive measure for the power sector. which is aimed at infrastructure upgradation and operational efficiency of the discoms. This would also mandate discoms with high losses to either privatize operations or appoint distribution franchisees and invest in infrastructure upgradation.

Yet tariff adequacy and adequate subsidy release from the respective state governments towards the discoms remain critical for ensuring a sustainable improvement in the financial position of discoms.