New Delhi: The finance and power ministries are working closely with concerned state governments to address the issue of distressed state power distribution companies (discoms) that are a major burden on bank finances, the government said on Monday.
“The issue of discoms’ debt is work in progress. We are working closely with the power ministry and the affected state governments,” Finance Secretary Ratan P.Watal said at a press conference here along with other secretaries of the ministry.
“The problem concerns eight stressed states, of which 3-4 are ‘badly stressed’ that account for 70 percent of outstandings,” he said
Finance Minister Arun Jaitley said last week that distressed state power distribution companies must make users pay for the power supplied.
“The Reserve Bank of India has already put those state governments on notice that if they don’t charge adequately and don’t make the users pay for the power supplied to them, the banking system cannot continue to support them,” he said while addressing Indian Banks’ Association’s annual general meeting in Mumbai.
He however did not disclose the names of the states in question.