Feb 26, 2002|
Scheme for one-time settlement of SEB dues
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.
More Views on News
Jul 25, 2017
Equitymaster HQ has been infiltrated. Valuable stock ideas have been leaked. Who's responsible?
May 27, 2017
What happens when minority shareholders are short-changed in the normal course of business?
Feb 15, 2017
PersonalFN believes SEBI has taken a step back-apparently in the admission of it going overboard with the regulations.
Aug 24, 2016
And here's your chance to claim a free copy of this book...
Aug 12, 2016
And Why India's demographic dividend could turn out to be a doubtful debt...
More Views on News
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 10, 2017
Bitcoin hits an all-time high, is there more upside left?
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407