There is a change of sentiment among the institutions on funding the power sector. A committee of FI representatives constituted by the power ministry had indicated last year that they were not in a position to provide the required amount for the sector while staying within the prudential norms.
The power ministry has now constituted another committee, headed by A K T Chari of the Industrial Development Bank of India (IDBI), to examine the issues involved in power sector finance, including the poor credit quality of the state electricity boards.
The committee has already met once and is expected to finalise its recommendations at the next meeting in two to three weeks. The earlier committee had estimated that FIs will have to provide Rs 27,000 crore till 1997-98 and Rs 40,000 crore by the turn of the century if the government norm of 40 per cent funding by Indian banks and institutions were to be met. A recent study, sponsored by USAID, said the top six institutions were capable of disbursing Rs 21,178 crore to the power sector between 1995 and 1999 and a total of Rs 60,782 crore between 1995 and the year 2002.
These findings were based on interviews with senior officials in the six institutions conducted by Hagler Bailly Consulting Inc and Crisil on behalf of USAID. The six institutions are Industrial Credit & Investment Corporation of India (ICICI), Industrial Finance Corporation of India (IFCI), IDBI, SCICI, Unit Trust of India (UTI) and Small-Scale Industrial Development Bank of India (Sidbi).
Two of them
