The Cupboard Committee on Financial Affairs on Wednesday accepted a one-time rest to Energy Finance Company (PFC) and Rural Electrification Company (REC) for extending loans to state-run electrical energy distribution firms (discoms), above their working capital limits underneath the Ujwal DISCOM Assurance Yojana, or UDAY.
The choice comes towards the backdrop of some discoms being unable to avail the Rs1.25 lakh crore reform-linked mortgage bundle for clearing dues. With some fund-starved discoms neither having the headroom for borrowing extra working capital, nor the requisite state receivables to clear their dues, the ability ministry had circulated a cupboard word looking for a one-time exemption on working capital limits positioned underneath UDAY, Mint reported on July 28.
“CCEA approves one-time rest to PFC and REC for extending loans to discoms above limits of working capital cap of 25% of final yr’s revenues underneath UDAY,” the federal government’s principal spokesperson mentioned in a tweet.
As a part of its stimulus bundle to convey the financial system again on observe after the Covid-19 lockdown, the federal government introduced this liquidity injection for discoms as a part of the Atmanirbhar Bharat Abhiyan, backed by state governments’ ensures.
The cash is to be raised by state-owned Energy Finance Company and Rural Electrification Company from the market towards the receivables of discoms.