Central government is likely to incentivise distribution companies (discoms), reports CNBC-TV18's Latha Venkatesh.
These are electricity distribution companies which are also called State Electricity Boards (SEBs). The coal end of the power sector is being looked at by the Pollock Chatterjee committee. The amount of money that must come from those who are buying the electricity is being taken care of by the Chaturvedi Committee and is being discussed various versions of that committee recommendations.
A lot of loans of that SEBs are sitting on the books of banks which are not getting repaid, and getting rolled over. So, the point is to clear that the backlog could be paid through bonds and the state government. According to sources, half of the new loan will be paid by the state governments, the other half sits with the electricity companies themselves.
In that 50%, which the state governments paid will come from the central government. This is all being at a discussion stage at this juncture but perhaps something will be concretised in the months to come.