The Union cupboard on Wednesday authorised a proposal to calm down working capital restrict norm for discoms below the Ujwal DISCOM Assurance Yojana (UDAY) to get loans as a part of Rs 90,000 crore liquidity infusion scheme.
After the Cupboard assembly, Union Minister Prakash Javadekar in a press convention mentioned, “Energy sector has an issue. There’s a stoop in energy consumption. The payments aren’t being collected by them. PFC and REC have been allowed to present loans above the restrict extra the 25 per cent working capital restrict. This can improve liquidity of the state discoms”.
“The working capital restrict is 25 per cent of final 12 months’s income. Now the restrict is relaxed,” he additional mentioned.
Finance Minister Nirmala Sitharaman had in Could introduced the Rs 90,000 crore liquidity infusion into cash-strapped discoms, dealing with demand stoop as a result of lockdown to include Covid-19.
Nonetheless, a few of the discoms weren’t eligible for getting loans below the bundle as a result of they weren’t assembly working capital restrict norms below the UDAY scheme.
Underneath the UDAY, the banks and monetary establishments are restricted to lend working capital as much as 25 per cent of a discom’s income within the earlier 12 months.
The restriction was a part of the UDAY scheme, which had been authorised in November 2015 by the Union Cupboard for revival of debt-laden utilities.
Apart from, the discoms can get mortgage below the bundle in opposition to the receivables from state governments to clear their dues. However a few of the discoms didn’t have headroom below each the provisions.
Thus the facility ministry had proposed to calm down working capital restrict norm in order that these discoms can avail loans below the bundle to clear their dues.