Finance Minister Arun Jaitley said on Monday that distressed state power distribution companies (discoms) must make users pay for the power supplied.
“The Reserve Bank of India has already put those state governments on notice that if they don’t charge adequately and don’t make the users pay for the power supplied to them, the banking system cannot continue to support them,” he said while addressing Indian Banks’ Association’s annual general meeting, without disclosing names of the states in question.
“Whereas our power generation capacity has hugely improved, our distribution network through national grid has improved but the final access or the last mile access is through the SEBs (state electricity boards) and at the level of SEBs, the reforms have been carried out by only very few states,” he said.
Referring to the recent meeting held by Prime Minister Narendra Modi in the matter, Jaitley said some important reforms in relation to the states with distressed discoms have been worked out.
“Those who want to fall outside this reform process will then have to suffer at their own policy levels and it will be advisable to all of them to follow the power ministry’s suggestion so that in the course of next one or two years, the distress of those states can be resolved,” he said.
He also said he is confident of maintaining fiscal deficit at 3.9 percent in the current financial year.
Inflation was under control and he is “extremely keen to better the country’s GDP growth rate from 7.3 in the last fiscal,” Jaitley added.
Jaitley, in his February budget had extended the target deadline for controlling fiscal deficit to three percent, reasoning that insistence on a timetable to contain the deficit would harm growth prospects.
The targets for the next three years have been set at 3.9 percent for 2015-16, 3.5 percent for 2016-17, and 3.0 percent for 2017-18.