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Batting for power generators, former energy minister Suresh Prabhu on Thursday said it is the sacrosanct duty of discoms to clear dues owed to gencos and the state governments should ensure the same.
Currently, distribution companies (discoms) owe over Rs 92,000 crore to the power generators, largely in the private sector, which is severely impacting the power industry.
"Till 2000 when power was largely controlled by the public sector, things were different. However, over the period we witnessed large investments from the private sector.
"If these power producers don't get the returns on their investments, they will not produce power. We cannot let the power industry as well as the generators go bankrupt," Prabhu, who is India's G20 and G7 sherpa, said during an online seminar organised by the Council on Energy, Environment and Water (CEEW).
He said government-owned gencos can continue generating power as they are backed by the Central and state governments, but same is not the case with private players.
"The investments made by the private sector helped India become power surplus. It is therefore thesacrosanct duty of the discoms to pay them the dues. We cannot have this approach that we will buy power but not pay for it. I feel the state governments should also play a key role in ensuring the dues are paid," he said.
Finance Minister NIrmala Sitharaman recently announced a credit line of Rs 90,000 crore through PFC and REC to discoms in state-guaranteed loans to clear the dues they owe to the power generating and transmission companies.
Citing a tripartite agreement signed between the RBI, and central and state governments in 2016 under which the Centre can withhold financial assistance to states in case of default by state-owned discoms, Prabhu said, "We have never invoked this, but there has to be some solution to ensure discoms pay the dues."
Prabhu further said state and central electricity regulators must be made accountable to ensure profitability, solvency, viability and cash flow of the generators.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)