Volume 2 of the Economic Survey (ES2) talks about three sectors central to the Twin Balance Sheet Problem (TBS) — high unserviceable corporate debt and high non-performing assets (NPAs). These are obviously related.
ES2 has a focus on the power and telecom sectors. Power has long suffered from poor management of state-owned discoms (distribution companies) and poor state policy. Discoms are forced to sell power at unviable rates, taking large losses. They also have high transmission and distribution (T&D) losses, meaning units generated are unbilled. In turn, generators, many being private players, don’t get paid and can’t service loans.
Some structural changes
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