Power Min: To help discoms with funds; tariff hike not an answer NEW DELHI

The government is not looking to "bail out" loss-making power distribution companies but plans to fund them to upgrade technology and improve efficiency, Power Minister Piyush Goyal said.

Goyal said the Centre was not in favour of hiking tariff for distribution companies and added that the final talks were underway for a resolution to the loss making entities' future operations. As per decisions by a high-level committee in the power ministry, the Centre is likely to put the onus of restructuring the debt of power distribution companies on states.

As part of a proposed financial plan, the state governments are to take over the entire debt of these firms, which will leave both lenders and the distribution companies loan-free.

The government also plans to increase the Fiscal Responsibility and Budget Management limit of the states by 25% to take over the debt of the ailing distribution companies.

Goyal said the Centre on Friday would meet officials from Tamil Nadu distribution companies on this issue. According to the previous financial restructuring plan, 50% of the distribution company's debt was to be taken over by the states and the rest 50% would be turned into long-term loans by the respective lenders.

On Monday, Finance Secretary Ratan Watal also said the finance ministry was working very closely with the power ministry and the state governments whose power distribution companies were reeling under huge losses to make them debt free. Stressing on the need to increase renewable energy capacity in the country, Goyal, who is also coal and renewable energy minister, said the government was looking to significantly lower import of coal used for thermal power generation in the next two years.

He added that the government has already cleared a proposal to set up 25 solar parks across the country and was in the process to approve another set of such projects. -Cogencis