Govt's decision to cut corporation tax likely to impact power bill

The Union government’s decision to cut the corporation tax is expected to generate savings worth Rs 4,000 crore to power distribution companies. 

Whether the savings will mean cheaper power or not, however, will depend on a host of regulations. The source of power, renewable or non-renewable, and the nature of the market, regulated or merchant, will be a factor in deciding whether the cost would go down. 

Conventional power producers are expected to see limited gains from the tax cut because power purchase agreements (PPAs) require them to pass on tax changes. Renewable power producers, however, may be able to absorb the