Amitabh Kant Committee ( NPAs in India’s power sector)
The Union Government has constituted high-level committee headed by NITI Aayog Chief Executive Amitabh Kant to address problem of Non-performing assets (NPAs) or stressed assets in India’s power sector.
Why needed?
- According to second volume of Economic Survey 2016-17 released in August 2017, NPAs in power generation accounted for around 5.9% of the banking sector’s total outstanding advances of Rs. 4.73 trillion.
- Tackling issues that afflict so-called stranded power assets will provide much-needed relief for Indian banks weighed down by bad loans.
- Besides, weak financial health of state-owned power distribution companies (discoms) is also hampering process of signing long-term power purchase agreements (PPAs) through competitive bidding.
- So far, a total of 34 coal-fuelled power projects, with an estimated debt of Rs. 1.77 trillion were reviewed by government after being identified by department of financial services.
- Issues faced by these projects include paucity of funds, lack of PPAs and absence of fuel security.