Scheme for one-time settlement of SEB dues - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Scheme for one-time settlement of SEB dues

Feb 26, 2002

A Conference of Chief Ministers/Power Ministers was held in March 2001 under the chairmanship of the Prime Minister. The Conference noted that the large amount of dues owed by the State Electricity Boards to the Central Power Sector undertakings (CPSUs) was a major impediment to power sector reforms and resolved that an Expert Group would be set up to recommend a one time settlement of power sector past dues to the CPSUs and the dues of the CPSUs to State Power Utilities. The Expert Group was set up under the Chairmanship of Shri Montek Singh Ahluwalia, then Member (Energy), Planning Commission. The Group submitted its report in May 2001. The Group proposed a scheme of settlement of outstanding dues linked to a mechanism that would ensure payment of current dues in the future. The recommendations of the Group, interalia, included securitisation of the outstanding dues through bonds issued by the respective State Governments. These bonds would be tax-free bonds and would have a tenure of 15 years.

The Group also proposed a 50 per cent waiver of the surcharge on outstanding surcharge as an incentive for the States to take up the scheme of securitisation. In addition, during the first 4 years from the commencement of the scheme, bi-annual cash incentives would be paid by the CPSUs equal to 2 per cent of the value of bonds. This would be linked to the States complying with the provisions of the scheme and reforms to be undertaken by the concerned State government.

The Empowered Group of Chief Ministers in its meeting held on July 6, 2001 accepted the recommendations of the Expert Group with minor modifications. These modifications included increase in waiver of surcharge from 50 to 60 per cent and incentives for a period of 4 years @ 4 per cent of the face value of the bonds for achievement of performance and milestones by the SEBs shall be increased from 6 per cent in the first year and 5 per cent in the second year. States have been requested to implement the scheme at the earliest by giving their consent for tripartite agreement. So far Andhra Pradesh and Jammu & Kashmir have conveyed their consent.

Equitymaster requests your view! Post a comment on "Scheme for one-time settlement of SEB dues". Click here!


More Views on News

Data is the New Oil but It's Also the New Sugar. Here's How to Fight it (Profit Hunter)

Jun 1, 2020

Is too much data hurting your quest for market beating returns?

Quantum Mutual Fund: Hum woh nahi hain (The Honest Truth)

Apr 29, 2020

Ajit Dayal on how the mutual fund industry robs you of your wealth.

This One Trigger Could Turnaround Yes Bank's Stock Price (The 5 Minute Wrapup)

Oct 16, 2019

If Yes Bank manages to do this, it could be the start of a much-needed turnaround for the bank.

Gold could Hit 40,000 Sooner Than Expected (Profit Hunter)

Aug 16, 2019

Domestic gold prices are firing on both engines now. Gold prices could touch 40,000 faster than you could imagine.

3 Rebirth of India Opportunities Are Racing Ahead in These Gloomy Times... (Views On News)

Jun 28, 2019

Tanushree Banerjee shares an update on the Rebirth of India and reveals her top 3 trends...

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms