A new incentive-based scheme to resolve stressed power sector assets is being discussed and it will involve investment support from the government, power secretary Subhash Chandra Garg said on Friday.
“We’ve recently brought a mechanism that you have to have the letter of credit (LC) before you buy power and if you don’t pay, that LC will be encashed. That discipline is needed… we are also talking about creating a new scheme where the reforms can be brought in backed by incentives and investment support from the government. That’s under discussion,” Garg told reporters on the sidelines of an Assocham event.
In no uncertain terms, Garg also noted that resolving stressed power assets under the Insolvency and Bankruptcy Code would only guarantee further value destruction. Read More
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