Govt to Hike Liquidity Package of Rs 1.25 lakh Crore for Distribution Companies

The Government is likely to enhance the liquidity package for distribution utilities to Rs 1.25 lakh crore from Rs 90,000 crore announced in May, according to a source.

The liquidity package announced by Finance Minister Nirmala Sitharaman as part of more than Rs 20 lakh crore stimulus for COVID-19-hit economy, would be extended for payment of outstanding dues by two months till May 2020.

Initially the package was for granting loans by Power Finance Corporation and REC Ltd to discoms for payment of their dues till March 2020.

“Ministry of Power has firmed up a proposal to hike the Rs 90,000 crore liquidity package for discoms to Rs 1.25 lakh crore,” a source privy to the development said.

Earlier in the day, Power Minister RK Singh in a virtual conference with state energy ministers said that the period of outstanding dues would be extended till May 2020 as against March 2020 under the liquidity package.

He said that the states have requested for a hike in the liquidity package and extension of period outstanding dues by few more months due to the impact of COVID-19 induced lockdown.He also told that states have asked for Rs 93,000 crore loans under the package and Rs 20,000 crore has been sanctioned so far.

At the time of announcing the package in May, Sitharaman had told that state discoms dues were Rs 94,000 crore. Bearing the brunt of lockdown, the discoms outstanding has swollen further.