Power Min asks RBI to revise sectoral cap of financing

The Power Ministry has asked the Reserve Bank of India to remove the sectoral cap to ease financing hurdles for power projects.

"To overcome the financing hurdle we are talking to the Reserve Bank of India to remove the sectoral cap," Minister of State for Power Bharatsinh Solanki said.

With focus in the power sector in the recent years, banks were facing difficulty in financing large power projects including ultra-mega ones due to sectoral cap, he said.

The government has planned to add over 78,000 MW of power generation capacity by the end of XIth Five-Year plan period. The current capacity is over 1.55 lakh MW.

Solanki said Rs 2,00,000 crore would be required to import equipment for 40,000 MW. Import of equipment was for fast implementation of power projects.

Heavy Industries and Public Enterprises Minister Vilasrao Deshmukh had earlier said bulk of supply contracts for power equipment should go to domestic firms like BHEL and L&T to protect Indian firms against cheap foreign imports.

The minister had also said the Planning Commission was studying imports of power equipment to find out whether foreign firms were dumping their machinery.

There was demand from domestic industry to levy high import duty on imported equipment in the forthcoming Union budget.