New Delhi: The government has barred 13 states from doing spot power exchange due to non-payment of bills worth Rs 51 billion ($640 million). According to reports, the government is moving towards making new rules so that timely payment can be ensured by the states.
According to Bloomberg news agency, S.R. Narasimhan has said that states can neither sell nor buy electricity until the generator and transmission company are paid.
State-run retailers are often seen as the weakest link in India’s loss-making power industry. Due to non-payment, crisis arises for the power producers to coal suppliers and project lenders. About 90% of the country’s electricity is sold through these utilities and failure to pay on time is seen as an impediment to investment to modernize infrastructure and provide reliable power supply.
The government of Prime Minister Narendra Modi has issued such guidelines so that payment can be ensured. Earlier this year, new guidelines were introduced under which national grid operators were given the right to deny electricity to states that cannot pay.
According to Narasimhan, many more states including Madhya Pradesh, Maharashtra, Chhattisgarh and Tamil Nadu have been barred from accessing power exchanges.
