Centre relaxed norms Power Finance Corporation

Why is it in news?
  • The Cabinet Committee on Economic Affairs approved a one-time relaxation to Power Finance Corporation(PFC) and Rural Electrification Corporation(REC).
  • Now  PFC and REC CAN extend loans to distribution companies (discoms) above the limits of working capital cap of 25% of last year’s revenues.
  • The changes are expected to provide liquidity to the power sector.
Details:
  • The power sector is facing problems currently.
  • Due to COVID-19, the consumption of electricity has fallen and bills are not being paid on time.
  • State discoms are facing liquidity issues.
  • The one-time relaxation will help provide liquidity to the power sector and ensure payments by States to discoms.
Posted by Jawwad Kazi on 20th Aug 2020
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