The finance ministry proposes to mop up Rs 14,000 crore through an acquisition deal between Power Finance Corporation (PFCNSE -6.03 %) and Rural Electrification Corporation (REC), but the power ministry is concerned that the move will hurt two sound navratnas in the otherwise ailing sector.
The power ministry is concerned about operational and administrative issues that might crop up after the proposed deal, said a senior government official.
However, the finance ministry is of the view that any such issues can be managed to create a large financing company for the power sector rather than having two central public sector units competing in the same space, he said.
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