Business

Privatising discoms of UTs will improve finances

The Centre’s decision to privatise power distribution companies in union territories is seen as a move that will improve government finances and bring much more efficiency to the sector.

“The power sector reforms announced will bring greater sensitivity towards large outstanding dues to power gencos, thus improving the financial health of the industry,” Ajay Kapur, CEO- Aluminium & Power Business, Vedanta Ltd., told The Hindu.

The government plans to introduce a tariff policy with reforms focused on consumer rights, promotion of industry and sustainability of sector.

Anish De, partner and national head, Energy and Natural Resources, KPMG in India, said, “On power, the past two decades of tepid results, despite corporatisation and regulation, have clearly indicated that the state owned enterprises have been unable to deliver efficiency, customer service and governance standards required from a modern power sector. Private ownership should bring in greater efficiency and better governance and help address some of the deep seated problems of the sector. UTs are a good place to start, though it should be propagated further into state owned discoms.”

The Confederation of Indian Industry (CII) said that the new tariff policy for the power sector can be expected to remove cross-subsidies that are adding to manufacturing costs and make Indian goods more competitive in the global market.

“It is heartening is that the government has taken another step on the path of distribution reforms by indicating early implementation of the National Tariff Policy,” Sumant Sinha, CMD, ReNew Power, said.

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Printable version | May 12, 2021 2:16:44 PM | https://www.thehindu.com/business/privatising-discoms-of-uts-will-improve-finances/article31603396.ece

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