Mumbai: Finance Minister Arun Jaitley today said the government will now look into the issues being faced by the power sector, after having taken steps to pull the highways and steel sectors out of distress. “We’ve taken some steps to pull out highways and steel sectors out of distress. Now something needs to be done on stalled projects and most important is to improve the health of the power sector,” he said at the Credia-Bankcon summit here.
The minister also said the main challenge in the power sector is at the last mile as many discoms are in distress. “Discoms in some states are in distress mainly due to their policy of not charging consumers for the cost of power, making the discoms dependent on bank loans. Banks cannot indefinitely fund them to subsidise consumers for political reasons.
“The problem is that not only discoms owe money to banks, even power producers also feel distressed as nobody is buying power,” he said. On the distress in the banking and finance sector, the minister said, “We have tried to recapitalise banks and given a road map for three-four years. Hopefully this will give more strength and muscle to our banks in the days to come.” He further said, “On account of the slowdown, the health of the banking system itself has been raising eyebrows.
“While the extra spending on highways has pulled one sector out of stress, I hope the recent tax measures will help pull out the steel sector from distress as well.” Jaitley also said very soon the government will revive stalled projects, without elaborating further.