The importance of the flow of capital into the power and housing sectors in India cannot be overemphasised. Recent developments in both sectors once again bring to the fore the critical issues of effective payment mechanisms and price transparency as vital factors to boost the economy.
Let us examine the issue in the two sectors separately. The Supreme Court striking down the Reserve Bank of India (RBI) circular giving stressed power companies more time to find resolutions outside the bankruptcy court has started debates around paths that are ideal for resolving woes of the power sector.
Amid the din and noise, it is essential to not lose sight of the core issues at hand, i.e., the late and in many cases non-payment of dues by state-run power distribution companies (discoms) in India. Read More