: Five states get additional borrowing of Rs. 2,094 cr for power sector reforms #FinanceIndia #StockMarketNEWS Five states get additional borrowing of Rs. 2,094 cr for power sector reforms New Delhi,

@StockMarketNEWS Mon 22 Feb, 2021

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Five states get additional borrowing of Rs. 2,094 cr for power sector reforms #FinanceIndia #StockMarketNEWS
Five states get additional borrowing of Rs. 2,094 cr for power sector reforms New Delhi, Feb 20 (KNN) Five more states namely, Bihar, Goa, Karnataka, Rajasthan and Uttarakhand have successfully met the target set by the Ministry of Power for a reduction in Aggregate Technical & Commercial (AT&C) losses or achieved the targeted reduction in Average Cost of Supply and Average Revenue Realisation (ACS-ARR) gap.

Successful implementation of the reform has made these five states eligible to mobilise additional financial resources of Rs. 2,094 crore. The permission for the same has been accorded by the Department of Expenditure.

Reform linked additional borrowing permissions are stimulating reforms in Power Sector in the states.

Reduction in AT&C losses and ACS-ARR gap are two of the three reforms in the Power Sector stipulated by the Department of Expenditure, Ministry of Finance. A part of the additional borrowing ceiling to the states is linked to undertaking reforms in the Power Sector.

States get permission to borrow an amount the equivalent of 0. 05 percent of the Gross State Domestic Product (GSDP) for meeting the target set for the state for a reduction in AT&C losses and additional 0. 05 percent of GSDP for crossing the ACS-ARR gap target.

Uttarakhand has achieved the targets for reduction in both AT&C losses and ACS-ARR gap. AT&C losses in the state have reduced to 19. 01 percent against the target of 19. 35 percent. ACS-ARR Gap in the state has been reduced to Rs. 0. 36 per unit against the target of Rs. 0. 40 per unit. Goa has brought down the AT&C losses to 11. 21 percent against the target of 13. 53 percent.

Karnataka has surpassed the ACS-ARR Gap target of Rs. 0. 50 per unit by reducing the gap to Rs. 0. 44 per unit. Rajasthan has also achieved the ACS-ARR Gap reduction target. Against the target of Rs. 1. 40 per unit, the state has abridged the gap to Rs. 1. 16 per unit. Similarly, Bihar has also achieved the ACS-ARR Gap reduction target by 10 percent reductions in the ACS-ARR Gap.

Besides these five states, Andhra Pradesh and Madhya Pradesh have undertaken the third reform in the power sector i. e. Direct Benefit transfer (DBT) of electricity subsidy to farmers. Consequently, these two states were given additional borrowing permission of Rs. 2,938 crore, equivalent to 0. 15 percent of their GSDP.

Thus, the 7 states who have undertaken power sector reforms so far have been granted additional borrowing permission of Rs. 5,032 crore.

Power Sector reforms stipulated by the Ministry of Finance aim at creating a transparent and hassle-free provision of power subsidy to farmers and prevent leakages.