Plan Panel proposes setting up of Electricity Fund
The Planning Commission has proposed setting up of a National Electricity Fund (NEF) to generate resources for improving power distribution network in the country.
By PTI |
NEW DELHI: The Planning Commission has proposed setting up of a National Electricity Fund (NEF) to generate resources for improving power distribution network in the country.
The proposal will form part of the Eleventh Five Year Plan (2007-12), which is likely to be placed before the full Planning Commission for its approval on November 8, sources said here.
The proposals for the power sector in the Eleventh Plan, currently being finalised by the Commission, will include augmenting the country's power generating capacity by 80,000 MW, setting up of peaking power stations and providing level playing field to private operators.
The total funds required for sub-transmission and distribution during the Plan period, which includes the Accelerated Power Development and Reforms Programme (APDRP) scheme, is estimated at Rs 3,09,177 crore.
In addition, the government also plans to float power bonds - Vidyut Vikas Patra (VKP) to mobilise Rs 50,000 crore to finance various projects in the sector under the Eleventh Plan period. The VKP to be floated on the lines of the Kisan Vikas Patra will have a lock-in period of five years.
The Power Ministry, in its presentation to the Commission on proposals for the Eleventh Plan, has suggested that the government should grant priority sector lending status to power projects and raise the income tax exemption limit for investment in infrastructure bonds from Rs 1 lakh to Rs 1.5 lakh.
The Ministry has also sought modification of the External Commercial Borrowings guidelines for encouraging overseas borrowings by the power sector. According to the suggestion, financial intermediaries like PFC, REC and other financial institutions should be allowed to borrow funds from overseas markets under automatic route.
The Commission will also take a view on the ministry's proposal of allowing state-owned Power Finance Corp (PFC) to incorporate an externally focused special purpose vehicle (SPV) to garner funds for development of infrastructure for power sector.
Among other things, the Commission will also consider the ministry's proposal to encourage usage of viability gap funding scheme for development of power projects falling in special category states.
The plan panel will also take a view on the proposal to restore the "Pass Through Status" for investment in power sector by the venture capital funds. The tax exemption for the power sector was withdrawn by the government in 2007 budget.
The proposal will form part of the Eleventh Five Year Plan (2007-12), which is likely to be placed before the full Planning Commission for its approval on November 8, sources said here.
The proposals for the power sector in the Eleventh Plan, currently being finalised by the Commission, will include augmenting the country's power generating capacity by 80,000 MW, setting up of peaking power stations and providing level playing field to private operators.
The total funds required for sub-transmission and distribution during the Plan period, which includes the Accelerated Power Development and Reforms Programme (APDRP) scheme, is estimated at Rs 3,09,177 crore.
In addition, the government also plans to float power bonds - Vidyut Vikas Patra (VKP) to mobilise Rs 50,000 crore to finance various projects in the sector under the Eleventh Plan period. The VKP to be floated on the lines of the Kisan Vikas Patra will have a lock-in period of five years.
The Power Ministry, in its presentation to the Commission on proposals for the Eleventh Plan, has suggested that the government should grant priority sector lending status to power projects and raise the income tax exemption limit for investment in infrastructure bonds from Rs 1 lakh to Rs 1.5 lakh.
ADVERTISEMENT
The Ministry has also sought modification of the External Commercial Borrowings guidelines for encouraging overseas borrowings by the power sector. According to the suggestion, financial intermediaries like PFC, REC and other financial institutions should be allowed to borrow funds from overseas markets under automatic route.
The Commission will also take a view on the ministry's proposal of allowing state-owned Power Finance Corp (PFC) to incorporate an externally focused special purpose vehicle (SPV) to garner funds for development of infrastructure for power sector.
Among other things, the Commission will also consider the ministry's proposal to encourage usage of viability gap funding scheme for development of power projects falling in special category states.
The plan panel will also take a view on the proposal to restore the "Pass Through Status" for investment in power sector by the venture capital funds. The tax exemption for the power sector was withdrawn by the government in 2007 budget.
ADVERTISEMENT
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
