not too distant. If·the dismal ..power situation' and waterstql'llgeIn reservOlrs are any·indiCation, load shedding iscertain to kick inafter theBBMPpollonAugust22...' Going by the aupply.(le-..mand gap, the city may have

fug three in south-ern ~.are already"" ... .....~_lJImnlvi:J1l!feeling the <pil,lch of the nav: .>'''0'power crisis. .. AccOrding to BesCOm

~urces, the poWer:genera'tion and supply situation inthe state is bag',due to rain.tleficitand othedssues', The;g9vernment., however, iskeen .on sparing Bengalu­rsans of power cuts at leasttill the civicpolls are over,forobvious reasons.

The consequ.ence, they.said, is being borne by thecity's seven neighbouringdistricts to which Bescomsupplies power,Power cuts inthese districts have touchedup to 10 hours daily,they added, .

. The Ildupi Power Corpo-ration, a private companythat supplies 1,200MW to thestate grid, is facing technicalglitches. The Udupi entity, , ...._ , .

'~~·(ii;J···jNi·~'·Ef~-·.New Solar rn~h('1.3Tracking DeviceResearChers from theIndian Institute of Sci-ence have developed animproved version of adevice that can track andorient mirrors, also calledheliostats, towards the sun.'These devices are impor­tant parts oflarge scalesolar thermal power plants,and are not new. 'The new'version is lighter, cheaper,remains stable even instrong winds and is betterat tracking the sun. ENS

IH.V.II.j.NI:111.]itii.I..JRlliti:M~1Ii~ljitefl~•• :I(":lg'~ilian~IQd~MIIQtr.iih13'i';'I~~'Qt\·lliIlM~I'DURG£SH IWMAR Y

Bangalore Mirror Bureaubmfeedback@gJnail.com

,:. :...

The power situation inI<amataka appears to beworsening with everypassing day.Continuous generation

loss at several thermal andhydel units across the statehas caused concern to thestate government. Evenas theenergy department has madeplans to purchase power fromprivate parties to meet thedemand, the whopping cost islikelyto jackup monthly elec­tridty bills in coming days.

Repeated loss in generationhas further widened the gapbetween demand and supplyin the past one week.The loss,which wasabout 2;210MwonMonday, has shot up to 3,020Mw in less than a week onSaturday. Out of the 10,189Mw installed capacity, thestate is generating only 6,600Mw to 7,300 Mw as onSunday.Speaking to Bangalore

Mirror, energy minister DKShivakumar said, "Water lev­els in our hydel reservoks,have gone down by 48 percent and inflow into dams hasalso dropped considerably.However, the demand hasbeen steadily on the rise andreached about 9,000 Mw onSunday. This might furtherincrease in the coming days ifit does not rain."While the state Is reeling

under severe shortage ofpower with more than 3,000Mw lQ5S'<j>fpower, the energydepartment plans to purchasepower from private genera­tors. "A total of 750 Mw ofPowerwillbe purchased from

GAPIJElWEENSUPPLY AND'\DEMAND \,,,i'::~·,10August 2,210 Mw

U August 2,820Mw

12August3,170 Mw

(above) A view of KPTC.Ltransmission zone at AnandRao Circle In the city. (left)inside the premises

as many as 39 companies at aprice of.Rs5.08 per unit. Eventhough a few firms quoted ashigh as Rs 7 per unit, as perthe tender procedures, wehave dedded to buy it fromlowerbidders.This willcost Rs342 crore per month andabout Rs 3,078 crore for theentire year.Wewill approach

the Karnataka ElectricityRegulatory Commission onMonday seeking necessaryapproval for purchase,"Shivakumar said.in the meantime, sourcesin

the energy departmentrevealed that additionalexpense incurred by thedepartment in procuring

power from private generatorswill be passed on to consum­ers when the departmentapproaches KERC for tariffrevision. "While it costs only52 paise for the governmentto generate one unit of powerat its generating stations, weare now forced to purchasepowerbyspending Rs 5.08 perunit from private players.Including transmission cost,this may come to Rs 5.50 perunit," the minister clarified.Woqied about drying up

hydel units, energy depart­ment is hopeful that thermalunits will be back in actionsoon. "Much to our satisfac­tion, the Raichur unit hasbegun supplying 1,014 Mwsince Sunday morning. Once

the sea turns calm, the UdupiPower Corporation Ltd. toowill also resume generationand thereafter the situationwill stabilise. Though there isa shortage ofwater, there isnoshortage of coal and morethermal power willbe gener­ated to meet demand. Now,we are also requesting theagriculture and horticulturedepartments to change theircrop pattern and switch overto crops that demand lesswater," Shivakumar said. .

\

\/

WITH A SHORTFALL OF MORE THAN 1,500 MW'OVER THE PASTWEEK, ESCOMS STRUGGLE TO MANAGE POWER SUPPLY

state stares at a crisis. Mohit M. Rao .BENGALURU

T he failing monsoons and outages inmajor thermal power generatingstations have put a dark cloud overthe power situation in the State.With an estimated shortfall of

more than 1,500MWover the pastweek, electricity supply companies(Escoms) are struggling to managepower supply during this "crisis",said Energy Minister D.K.Shivaku­mar here on Sunday.Though large parts of the State

continue to faceblackouts, especial­ly during peak hours, the Ministerinsisted that Escomswill not resortto power cuts to manage shortfalls.During a visit to the State Load

Dispatch Centre here, Mr. Shivaku­mar saiddeficitmonsoonswere see­ing lower outputs fromhydro-electric power stations -leading to an immediate shortage ofmore than 300MWfrom the State'srequirement of 8,500MW.The situation got aggravatedafter

August10,when thermal power sta­tions such asUdupiPowerCorpora­tion Ltd., Raichur Thermal PowerStation and BellaryThermal PowerStation started shutting down theirunits due to maintenance and tech­nical problems. OnAugust 12,pow­er generation dipped by 3,170MW,while on Independence Day mostareas plunged into darkness as3,020 MWwent out of the grid, acecording to the Minister.The State had made contingency

plans for September, but the poweroutage has forced them to seekshort-term buying of power, said

. ,

BLACKOUT CONTINUES

IState's I Present availabilitydemand 6,600 MW to 7,3008,500MW MW .

Escom(electricity supply companies)1n State facingan average shortage of 16 million units a day ,

atpercent ofinstalledtapacity

is nearly 3,000 MW daily Ructuatesbetween August 12and between 300 MWAugUst 15 and 1.600MW

PURCHASE 'CQ$t.<lveragearound.Rs. 5.08 perunit from around 38 private playersin south India and Maharashtra

Estimatedadditionalexpense permonthRs.342 crore

Ifsltuatloncontinues,Rs.3,078croreneededtill nextmonsoon

Mr. Shivakumar. Tenders to buymore than 750 MWfrom over 38private operators were in theprocess, he said. This, however,comes at acost ofRs. 5.08per unitcompared to hydroelectric gener­ation of around 60 paise; and aburden on the exchequer of overRs. 3,000 crore is expected tillMay2016."OnMonday,Karnata-

ka Power Transmission Corpora­tion Ltd.willseek permission fromKarnataka Energy RegulatoryCommission to start purchase ofpower,"Mr. Shivakumar said.With BTPS expected to start

functioning in full within 10 daysand UPCL by next month, theMinister hoped for some reliefsoon.

/

•I,

'tt.&~\ l1{pfl(I~very Bihar village

will have electricity .by 2016-end: NitishAm~ath Tewary .

. ~AtN'fjBi~~t'Chief Mil1~t~r Nltlsll K~ar~d;b~i~tb'; ;. ~Sundaythat all villaC)esin the State would haveelectricity by Z016-end.

He hadin ZOIZsaid that if he failed to ensure powersupply, he would not ask for votes in the Assemblyelections in Z01S.Prime Minister Narendra Modi, in arecent speech, had criticised the State C)ovemmentforpoor avaHabifity of power:

Contrary to the Prime Minister's claim, the powersituation had improved, and by ZOl6'end, all villaC)eswould be electrified, Mr. Nitish Kumar told a select«)roupof presspersons at the "Breakfast with the CM"prOlJramme,which has a format similar to the oneorC)anisedfor Mr. Modi durinC)the loll Sabhaelectionsin ZOI4.

'Media campaign'Janata Dal(U) sources said the election publicity

team led by Prashant Kishor had conceptualised the, proC)ramme,but the Public Relations Department

orC)anisedit. The presspersons were C)ivenaquestionnaire on education. health and others sectors.

"It was nothinC)but part of a media campaign by theChief Minister in view of the Assembly elections," aState BJP leader said.

Whenasked during the prOlJrammeif every .household would have power connection by Z016-end,Mr. Kumar said it would depend on individualconsumers, buUhe focus would be to include all.Thanks to the steps to tone up generation,transmission and distribution, power supply now stoodat ~,100 MW.as agains: a meagre 70 MWin~

\/

I f'.t.. C-'-9'T'U'~·..... , , ,.,~, (r,,1' I IJ . - tbHasmukh Adhia I The best thin,ggovt hasdone ~, promise banks not to intj,~,rtere, Because,when Y,'ou~" forcingFinancial Services Secretary them to lend to particular pr~ zs,there is anoverexposure in some sectors & bank~ ) stuck

Consolidation Has to be Bottom-upProcess for BetterAcceptability

WI. you faRe l1li*5 IDse.their____ assets?

We have stopped imposing any decisionson banks now, as you may bewell aware.Banks themselves are working on their.strategy to get out of non-core assets.They will hive offtheirnon-core in-

•vestments at appropriate time. For ex-

tom-up. Then the acceptability will be All banks don't need to grow at 12%. ON BANK BOARD B.UREAU ample, inthe caseof the insurance sector,better.aas will engagewith various Smallerbankscandecidetohaveamod- bod' '11' t t 'fthItw 'lllbeapat-trrebod y any YlsWI 109 opu moneY,1 erebanks and stakeholders. If the bank em- est lending growth rate at 6-7%.The re- is a bank-promoted insurance company.ployeeS see value in that (merger}then it mainingbankcredit requirement can which will hold reg'ular Banks are looking at all these options. It'swill happen Quickly and nicely. In the come from big banks to whom we are giv- all on acase-by-case basis.wake of fierce competition where sur- ing morecapital. More efficient bigger interaction with banks and The bestthingthis government hasvival is in Question, thenacceptancecan banks cangrow at 14-15%andthesmall- d' . st t ' doneisto promise banks not to interferebeeasy. er banks can consolidate their position ISCUSS ra egles and allow them to take commerciallyDoyOUthink the t70,IICICI-<r'an! for some time. Wewant banks to take indiv iduaIIywith top sound decisions. Because,when you arepackace Istoo littlec:onsIcIerInc Chat care of their bottom line also. If you look forcing them to lend to aset of particularthe capital requirement for all PSIs at the new framework of key perform- management The BBB projects, even in the greed of havingaI-.hlk·~banks· )Ismudlhl--. anceindicatorsQKPls),noneoftheKPlsis h' h GDPgrowthrat the th ........._.... ..-, w'lll alsomake suggest'Ions Ig er e. n erersenWhat we are planning to give ismuch really linked to the tool ine but measured overexposure in certain sectors andmore than what they need. Even today, in terms of efficiency of operations. to government that's where most banks get stuck. Thereexcept for one bank. no bank is below 7% Underlhls _ approach,what are the are various other ways of raising moneycapital to risk-weighted asset ratio plans forllldclln& bad loans? HASMUKH ADI-IIA for an infrastructure project but so far(CRAR).For 2016, the Basel 111stipulation We have been telling banks to take bold FinancialServicesSecretery promoters have also not gone for thoseis 6.15%CRARfor common eQuity and we action and now with the top management If the idea is that banks hive off bad alternative options simply because therewant all banks to end the year at least at being placed in these five banks (with loans after a haircut, that option isal- was aneasy loan option available from7.5%and nothing lesseven if they grow new appointments), it will make a lot of ready available. They can sell their bad PSUbanks.by 12%.Similarly, gOingforward, the idea difference. We expect them to take some loans to ARCsnow also. The bank should Even for banks it was easy. Why botheris to maintain a safe buffer so that if sound decisions, in terms of solving their be accountable for their own lending, and about developing the retail market orbanks have to make some provisions on NPAproblem,like they canhive off bad they should take all steps to recover that MSMEcredit, when we have bigcorpo-any awiuntlhey do not feel hesitant to assetsto ARCs(asset reconstruction com- Even if we shift these stuck assets to a . rates lining up for loans. This kind of lazydoso, and further they have enough panies), think about taking strategic can- new ARCand there is a need to give more banking isnot goingto work anymore.comfort in terms of lending. Also, asmar- trol and force the promoters to bring in fund to such stuck projects, where itwill Besides,the economy will surely findket valuation of PSBsimproves, they can more equity. It all has to bedone on a come from? Also, for any suchnew entity other avenues of funding, if PSBsreduce

50, Is the B8B II prwcursor~anIs easily raise more thanU lakh crore. Our case-by-case basis. Someof the prab- tli develop expertise will take acouple of their exposure towards infra financing.mercers amonc state-ruiI '-«Iers? ultimate aim is to improve their market lems are also because of global slow- years. So,this isan idea in which the gov- What about the situation InelectricityAnd,'_ wiD the pYSmII!IIt cap, bring price to book value ratio to down With good monsoon the domestic distributionCIIIIIPlIIIIes? ---...;.convtnceotherstakehOlderssuchllS morethan1,sothattheyareabletoraise d . dsh Id . k h'· h '11 ernmentwillhavetoloselotofmoney._unIans? eman ou PIC up,W IC WI re- Instead,itisbettertogiveextracapitalto WeareworklngoutstrategiesforthemIt is not a precursor to mergers. But it is more capital. store the Investment cycle and Some Of banks, to absorb haircut in order to clean alongwith the power ministry and re-goingto bea specialised body looking at AmajorportlanlsllllocaledlDbil these stuck assets may get resolved. It is uptheir balance sheets. spective state governments. There are

banlcs.WlllthlsnotcurtJthelend.... nota situation of panic when it comes to Let t II h h four states having amajor debt portion-variousoptions.Webelievethatlhe ... bad loans. me e yout atwe ave alreadyprocess of consolidation hasto be bot: ability afsmaller banks? tried t~is in the past through SASF UP,Rajasthan, Tamil Nadu and Haryan~

111!JIIIIIIIIII_lJ!IJ~I!!.tt!!!Hll.IJ,!!,I_m_!.I!!Ullil!WJJ!IJl'.m_l!1J11,I.l.1JlUUUlIJJJ1UUII_II,IIIIUlJIIIIIIIIIUIIlIIIIJIIIlIJIIIIIII1I1UlIIIIIIIIUIIIIIIIUiIIllIlIUfllIIlIlUlllllllllllllllllllllfllllltlllllllllllllllllllllllllllllllllilllllllllllUllIlllIIlll1111II1II1II1II11I1111I111I111I1I11l1l11l1l111111111111111111111~

There is a need for consolidation among·state-run banks and if the proposed BankBoard Bureau (BBB)cannot convincelenders to act on their own, the govern­ment may step in, said financial servicessecretary HasmukII AdhIL He explainedthe contours of the government's seven­fold Indradhanush revamp strategy forstate-run banks in an interview withErs~nw.t. Edited excerpts:

WhlItlsthe_ SIDI.Grthe1nCInIdIIIush stratecY?Our goal is to make state-run banks effi­Cient, at par with or even better than pri­vate banks. Banks need to follow differ­entiated strategies, and focus on nicheareas. From April 2016, when the BankBoard Bureau (BBB)will start function­ing. it will also look at these strategiesand will advise banks accordingly. Forexample, some banks can become localregional players which are strong inMSME (micro, small and medium en­terprises) and agriculture. Wewill haveBank Investment Company, which mayrequire some legislative changes and canbe brought about after acouple of years.

Will the BankBoardBureau (888)decide stratepes for Individual1111*5?It will be apart-time body which will holdregular interaction with banks and dis­cuss strategies individually with topmanagement. The BBBwill also makesuggestions to government. Apart fromnudging the banks themselves, the BBBcan also make suggestions to the govern­ment on strategies of banks. BBBwill en­gage with the banks and convincethemabout desirable strategies, and if theycannot do it, then the government mayhave to take a decision. This is the bot­tom-up approach we are talkingabout

//

IS. 'badbini(•Ylable aptIon? (A 'badblnk'lsusedlD 1soIIite..........wwst-a.)Somepeopletalkof hiving off all baddebts of PSBsto a new entity to be cre­ated by the gOll~ment There are threereasons why ttlis idea may not work.First of all how will this new entity ab­sorb lossescoming out of bad assets?Thegovernment equity in the newentitywillhave to absorb these losses ultimately.Banks' gain becomes government's losshere. The idea that one entity's badas­sets problem is sorted out by a newly cre­ated entity which has no prior experi­encesounds bizarre.

(Stressed Assets Stabilization Fundl,wherein ~,OOO croreof stressed assetswere transferred when IDBlwascon­verted into a bank. This trust has reco­vered f4,500 crore and the remainingvaluation of the block is around f400crore, so it is the government which willhave to take a hit of unrecoverableamount in this case.

I

;: '11lr IVfJ,.) ~.NO'!A'" Gx Pa2..ESJ Q)') 11--(tILcJ\r PJ:o\·Crisis Pushes State to Buy Power at ~342 Cr Per MonthExpress Ne.. ServIce

Bengaluru: The State gov­ernment has decided to ad­vance itspower purchase bya month to tide over an im­pending power crisis.The state willbuy 750 MW

daily till May next year at~342 crore per month, En­ergy Minister D K Shivaku­mar said here on Sunday.The decision is the result

of poor storage inmajor res­ervoirs and the unexpectedshutdown of Udupi PowerCorporation limited (UPCL)due to a technical snag.

Speakingto reporters after

reviewing the power supplysituation, the minister saidKarnataka Power Corpora­tion limited (KPCL)willbuythe power from 38 privateproducers at a cost of ~5.08per unit to offset an averagedaily deficit of 3,000 MW."The additional financial

burden on the state exche­quer is expected to be around~342 crore per month andthe estimated expendituretill May 2016 works out tomore than ~3,078 crore," hesaid.The minister said the pro­

curement price for Karnata­ka is cheaper than that paid

by the neighbouring states ofTelangana and AndhraPradesh.He said the suppliers quot­

ed ~7.20 per unit, which wasfinally negotiated down to~5.08.

L The procurement• price forKarnataka ischeaper than that paidby the neighbouringstates of Telangana andAndhra Pradesh

- D I(SHIVAKUMAR,Energy Minister

No Power OutageShivakumar, however, ruledout further power cuts inboth rural and urban areas,saying that "the rainfall situ­ation may improve in thecoming days".

He said apart from the lowstorage inSupa, Mani, Kadraand Alamatti dams, the un­expected technical hitch atthe 1,200-MW UPCL hadworsened the power supplyin the state.As on August 15, the total

storage in the three majorreservoirs of Linganamakki,Mani and Supa is enough toproduce 4,020 million unitsas against the 6,573 millionunits produced last yeararound the same time."Against the total installed

capacity of 10,189 MW, theavailability of power from alltlie sources is only about

6,600 to 7,300 MW (daily)," _he said.Expressing apprehension

over supplying adequatepower to the agriculture sec­tor this year, the ministerappealed to farmers tochange their cropping pat­tern. The electricity supplycompanies in the state aregetting only 168million unitsof power as against the daily

, requirement of at least 184million units, he said.Senior officials in the

Energy Department, includ­ing Ravi Kumar and Ma­heshwar Rao Balaram, werealso present.

uas t'ZEi'JSlSliiifiii .:sw -----

~td.~ rllt{rf11ar-reaching amendments to Electricity Act 2003may run into political roadblocksIndrani Dutta

KOLKATA: The proposedamendments to the Electric­ity Act, 2003 through theElectricity Amendment Bill,2014, has already attractedthe ire of some state govern­ments, as it will have deep im­pact on the Indian power, sector.

"The key intent behind theamendments is to allowcom­petition and better customer, service without significantlyincreasing tariff," YogeshDa­ruka Partner, Advisory, PriceWaterhouse Cooper Pvt Ltd(pWC) told TheHind.uduring

an interaction. While the2003 Electricity Act broughtprovision on open access, en­abling power trading whilede-licensing generation, themain objective of the he pre­sent set of amendments is toimprove governance. It alsoaims at enhancing competi­tion in distribution sectorand strengthening grid safety.However, there are severalsections that may run intohurdles with the state gov­ernments and the bill may nothave an easy passage throughthe two Houses ofParliament.Parliamentary Standing

Committee has given its rec­ommendations to the amend­ments and it is now ready forbeing placed before Parlia­ment, it was learnt.

Legal ramifications"Some are still wary of the

legal ramifications of separat­ing carriage from content andits impact on the average con­sumer and on consumer ser­vice" the PWC report onchanging rules of Indian pow­er sector : empowering theeconomy said. The report wasreleased here at a recent En­ergy Conclave organised byCII. There is also provision of

setting up a body to monitorthe state electricity'regulato­ry commissions. Mr Darukasaid. adding that there isscope of superseding a stateelectricity regulatory' com­mission. He said that the keyamendments to the Act .wereseparation of carriage andcontent. boosting renewablepower generation throughgeneration obligation (in ad­dition to the present pur­chase obligation). provisionfor open access and tariff ra­tionalisation.Separation of carriage and

content envisages significantreorganisation of the distri-

bution and supply frameworkeffectively separating powerdistribution from supply.This will provide for consum­ers having increased optionsin terms of choosing a suppli­er as more than one supplylicensee can share spacewithin a particular distribu­tion area. This will encouragecompetition in the retail seg­ment. the report said The re­port also dealt 6n coal sectordevelopments saying that therecent auction has still leftsome questions unanswered.The need of the hour was tore-look at the existing miningpractices prevailing in India.

.:

With the deadlock inParHamentstalling •key reforms, the gov­

ernment has turned its focus to executive ac-tion to 11ftthe economy starting with the an­nouncement of acomprehensive newframework for state-run banks on Friday_Thegovernment is moving forward on other ar-

• eas to make sure growth gets the structuralboost that It needs attnis key stage in the eco­nomic cycle, minister of state for financeJayant Sinha told Deepshlkha Sikarwar in anInterview. Edited excerpts:

SpendiIllIS llellll front IOIdecL Would dielOyenunent look at rtllaxllll fiscal palsfIIr1IMrto spur publll: expenditure?We have a very healthy tax situation. Our in­direct tax collections have been very strong.We are Quite confident that we will have thefiscal space to undertake spending that is re­quired to lift the economy. We have althissiage not in any way considered changing thefiscal deficiltarget. We are very much com­mitted to 3.9%for the current fiscal.

Will die lOyernment _lIerate executivelCtIan with parliament deadlOCked?Of course. We will to continue to do the ut­most we canwith GST(goods and servicestax). Wewill trytoconvincecolleagues acrosspolitical spectrum that they need to rally be­hind GST.lt Is In India's Interest. It Is inthe In­terest of our young people that need job~.lt IsIn the Interest of our global business partnersand Investors that are looking to Invest here.Nonetheless, asa responsible government

that Isworking across many different spec­trum, we have a host of other reform Initia­tives that we are working on. You saw whatwe have done as far as banking is concerned,which Isavery comprehensive transforma­tion framework. We are moving forward onallother areas aswell because we really wantto make sure that the economy gets the struc­tural boostthatlt needs althisvery Impor­tant stage in the economic cycle.

The bInkInc sector has many Issueslltbind. Will thispackace suffice?We all recognise that we are witnessing muchmore competitive activity In private sector

banks--Impactoftechnology, moving to­wards cashless solutions with mobile phones,differentiated banking licences on tap thatmeans coming into the fray ofsmall banks,payment banks, more commercial banks andforeign banks setting up subsidiaries. Publicsector banks have a vital role to play. They arethe core of dur financial system, so it's impor­tant that they bewell positioned for future.We think with this comprehensive frameworkwe have positioried them well for the future.This framework does not contain much to ad­dress the NPA (non-performing assets) issue,which Isseen asa huge challenge right now.Idon't agree with this view. I think we have

addressed the NPA issue in a very cornore­hensiveway. we have worked with the RBI(Reserve Bankof India) ensuring that thewhole NPAmatter is made fully transparentand it is fully disclosed. Provisioning and rec­ognition norms have been strengthened quitea bit and the whole problem isout in the openand we know what it is like. We are dealingwith NPAsacross four dimensions.Firstly, as far as NPAsare concerned, there

are a number of situations that have to bedealt on a case-by-case basis. We have estab-

We ..... CIIIIIDJe dalheutmDst__ wllhGSl' try ... _

vlnceClllelpa_paItbIspec-1nIIII1hllt1hly nllylMlllndGSI'.ItIsInIhe ot_ .....buslnlSspnw-s1lld IlMistanthat.. 1ooIdnI ... 1nvest ......

like It would yield desired results. aot, like Isaid,with NIIFwe have the ftexibility tocreatespecial distress situation type funds. (TARPorthe USTroubled AssetRelief Program wasaimed at shoring up the.country's financiai sec­tor aftertheaedit crisis in2008.)

U.llakh crore has to come frornthe markets.OUrsuggestion to banks asprincipal share­holders ISthat they should do that typeof dilu­tion and raiSingof capital from markets whentheir price-to-book multiple and their valuationmultiptes are much healthier than they are rightnow. Wewould expedtheir boardsto look atwhat isan appropriate time to raisecapital.

nancial system ijnd in some ways very differ­ent from r.egularcommercial banks. Obvi­ously, we have to build the infra financingindustry in India which will require us to havea much deeper corporate bond market. Wehave specialised institutions in India but wehave to build and strengthen them. We needsovereign wealth funds like the NIIF,we needforeign investors coming in much largermea­sure than they are now.We have to have all these elements in place if

indeed we are to provide trill ion-dollar fi­nancing to our infrastructure over the nextfive to ten years. We have expectedourcom­mercial banks to fund infrastrtJcture and thereisa real asset-liability mismatch there be­cause typically most of their money is shortduration and infrastructure projects are longduration. That in some ways is not best way tofinance infrastructure. .

..The caplbllisatloo planfarblnksIncludes I'llsllIIfunds frommarkets.1IDW soon couldtIIlshlppen?Bankswill have to go themarkets atlhe righttime. They are all QuiteadeQuatelycapitalisedright now. OUrcalcula­tion is bankswould re­quireU.8lakh crore byFY19asper Baselillnorms.Ofthis,f70,OOOtrare will come fromthegovemment and the balance

projects assets in various sectors so that wecan deal with stressed assets.Weareconsid­ering if we need aspecific solution for in­stance for the power sector or tor the roadsector. Within NIIF,we could potentially havea fund that looks at these stressed assets.Wecould also have Industry specific funds. Wewill be looking at bringing new capital to thetable. Fourthly, therearealso systemic in­terventions required atthe policy level. Forexample, how we deal with discoms (~ect~­ity distribution companies) is somethingt at~evelofbanksorevenon a case-by-case basis.Wecan look at put­ting in a framework to deal with the debtburden that discoms a,ecarrying, Fifth'~"the effortis to put in place aworld-class ',," ~ .bankruptcy code so thalthese matters canbe resolved speedily in future with moreclarity on rights of all partiCipants. TheTKViswanathan committee will be giving itsreport shortly and we are hoping tobring bankruptcy legislation Into parlia­ment in the winter session.

11Iere was a sugestlan reprdllllbadbanks-

What Is tile plan far tile CICII'IIORte bandmarket?The RBIand the ministry of finance are workingon a number of measures.Weare looking com­prehensivelyat how to deepenthe bondmai1<et

As.promoterof multiple bMlks,wheredoeS cansoIld.tIon ncurlln tileaavemment's tlllnldllC?We have to have well-capitalised and highlycompetitive public sector banks that are ableto playa commercial role asalso serve pol­

icy calls. They have a Publ ie role to playthat they have demonstrated through

We have considered awhole host of the Jan Ohan Yojana. We want to makelished a special group within the department solutions that have beentried sure that we provide them world-classoffinancial serVices that isworking with the around the world. There are bad / governance, management talent. oper-Joint lending forum that banks have put up for bank solutions, thereareTARP- ating autonomy so that they are bestindividual cases. It is bringing all the parties like solutions, there are super able to achieve these goals.together-- banks, promoters, regulators, oth- ARCs(assetreconstruction com- Wehave the objective to make theseer potential investors around the table so that panies), national ARCs.Weare banks strong, We have given banksoper-we can sort out on a negotiated basis asolu- not ruling anything out althis ating autonomy. Thegovernment can-tion for some of these situations. point As of now we are pursuing a not mandate or dictate to banksonSecondly, through the National Investment divide-and-conquer approach ...,'\.\ what their merger or consolidation

and Infrastructure Fund (NIIF) we are putting with NPAsand looks . strategy should be.That's for bankstoin capacity and ability to take on these workthrough.brownfield projects and to bring in new eq- Once they come up with some propos-

u~i~~~~~~~ntinuetoex- / / ./' ~.. '.; -'-~. ,"~.., f"""" ",~.:~~::::,::::::;;::::"~~~~~~~e~~~i~~~yp~~~~::b:~ >"...,~~" . '~RfNORA)~A .fffi" 7,:: beabottom-uptransformation.

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We haYeto haVe well-<apltallsed.. blehly Cllllllll(ltlve public sec­tor banks that .... bleto plllY.Clllllll*'dal role 1IS·1IISo,.". pol­Icyallis. lIMy 1IIv.. publkrotetoplllJthatthey hllvedemuilsb .hIdthroulhtIMJanDhanYoJ- '

FlnancllII of Infrastructure to alarcl extent led totllis Issue.Will PSIs (publlssectorbInks) lie cIIscaunced fromJendllllto tile sector?Part of the reason that we

have anNPA problem rightnow is because we had amonolithic approach to fi­nancing infrastructure in In-dia. Around the wo,ld, financ­ing infrastructure is avery

specialised aspect of the fi-

... 1J" tc~i c, " 'f~~ ,\trl (\Telecom Infra cos.can rj.4Save 18% on Fuel,f 'Diesel Comes Under GST

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D•• paILGUpta@timeSgroup.com

Mumbal: Telecomtowercompaniescouldsavearound n,500crore a year on thelr dieselbills alone if petroleumproductsare addedto the list coveredunder the proposedGoods &Ser­vicesTax regime.Thesavingswillbeenoughto launch fourth·generation serviCesin abigcity.Thepotential savingsmaybetoosmall topass onto consum­ers bywayof cuts in thelr telephoneand data tariffs, but willsurely addtothe resourcesof towercompaniesto invest in in­frastructure, saidaseniorexecutiveata telecomtowercompa­ny.Fortheconsumer,thebenefitwouldcomein theformofbet-ter servicequality. .Indus Towers,Bharti Infratel,ViomNetworks,RelianceIn-

. fratel and others buy'diesel to run electricitsrrators, the main.powerbackti .at towers es. Esfiiiiates put the telecom industry'sdiesel consumptionat 200crore litres a yearandthe costonit around '('8,500crore.NitishSharm~, executivedirector atNangia.and Co,a CAfirm, said a telecominfrastruc-.ture companycouldsave15-18% on fuel costsif dieselcomesunder GST.Thecompanieshavecut downondiesel con­sumption by using other means of powerbackups,butstllldieselremains themainstayformostof them."Wethink the overall diesel consumptionvolumehasprobablycomedownQY20%from(three years ago).Howeverthere has'been aprice increase of about 25% in the period,leading to about similar total cash outgo on

diesel,"saidMohitRana,partner at ATKearney that had un-dertaken thefU"Stofitskindanalysisof.fue~consumedbytele­comcompaniesin 2011.GSTseekstocombineindirect taxesat state levelsto increaseefficiencyin tax collection.Whilethe new tax maybehigherthan the ones it replaces,the proposedsystem allowsbuyersand sellersto availof certain tax credits at diffeI1lntstagesofproductdevelopmentorservicedelivery,resulting ina net sav-ingforbusinesses.

-PotentIalsavlncs maybe toosmalltDpass ontomnsumenI

~ byw.yofcutslntMlr.teIeIJhDM,

datatarms.bUtwillswelYaddtoresources oftower COltDlnvestlnInfraStrUdUI"I

"c~gp='S;t;~";'"Threat to India's Security'

Distribution-\evel cyber attacksSarlta.Slnlb@timesgroup.com that disrupt powersupply tosuch fa-

cilities canhave important econom-NewDelhi: Domesticmanufactur- ic and security consequences, IEE-ers have slammed the decision to MAsaid. . .award contracts to Chinesecompa- Such attacks can lead to control ofniesfor installation of supervisory the, distribution· system from re­control and data acquisition sys- mote areas, exchangeof critical da­tems for better power distribution ta and agreater threat to the nation­andmanagement in 18cities,saying al grid, it said.this can lead to foreigncontrol over China's share in imports of electri­a sectorWhichis crltlcalto the coun- cal equipment into India grew totry's growth. nearly 40% in 2013-14from15.26% inThe contracts have been awarded 2005-06.by seven cities in Tamil Nadu, five Over this period: imports of elec­each in Rajasthan andMadhyaPra- trical equipment into the countrydesh, and one in Puducherry since increased 19.73% to '('58,354crore.2011through competitivebidding. The cheaper im-This couldposea threat tonational - ports have also af-security as well, domestic players contracts fected the localsaid, since electric distributionsys- haVe been transmission andterns carry power to pipelines, wa- awarded by distribution equip-ter systems, telecommunications 'sevendtlesln ment manufactur-and other critical infrastructure, Tamil Nadu, ing industry, whichbesides serving critical govern- nveeachln is operating at lessment andmilitary facilities. Rajasthan than 70% capacity,"The Chinese Seemto have an un- andMllClhy. thathasnotseenany .

I stated pollcy of not awarding any PnIdesh..xI growth in capital ex-sensitive contract involvingnation- one In penditure over thealsecurity to Indian companies.On PUcIUcheITY past fewyears.the other hand, we have not been since 20U The Indian electri-cautious in awarding contracts in- cal equipment in-volvingcriticalcomponentsincriti- dustry - comprising generationcalsectors," saidlndianElectrical& equipment (boilers,turbines, gener­ElectronicsManufacturers' Associ- ators) and transmission, distribu­ation director generalSunilMisra. tion and alliedequipment (transfor-"For example, a lot of electricity mers, cables, transmission lines,generatlOn eqUIpmentwh1chhave switchgear and energy metres) -

, 't~l'ftef ncrbiDese campaDles 1S was valued at U.36 lakh crore innot perlormini satisfactorily in 2014-15.many~" The generation equipment sectorI£EMAhas madea representation accounts for about 15% of the totalto the National Security Advisor, industry while the transmissioncabinet secretary and the minis- equipment sector forms the bulk of

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with BBMP polls just rou,nd the comer, BM correspondent Atul Chaturvedi had a dekko at the offerings of the three main parties~ ,and how they plan to change the way the city isgoverned if they come to power after the municipal election

, - I

run upthe BJPhad promised amonorail network, a local train serv­it;e, eight-lal'le roa~ at~1 entrypoints to the city. u~iI1g~major roads,a sepa~J)!Iwer 'grid for the city, tr!irisfonnatk:mof Bengaluru into Iiworld.class CCTV cameras,controlcity with an~:':~~~&~1in,';" , rooms and street lights

to be installed; schemesprovide skill-training

" centres will be formulat­" ed to empowerwomen

, ~, ""~,.~",,,"-"~'" REALITY: ThePoliceDepartment looksinto worpen'ssafety ,

PROMISE: ENHANCEDINFRASTRUCTURE: ~5,OOOcrforen­hancingbasic infrastructure projects; exclu­sivebus corridors; repairing potholeswithin48 hours of receiving complaintsREALITY: BBMPis under debtoH'3,OOOcrin addition to pendingcontractor arrears. Sig­nal-freecorridor was initiated but the projectwas sent to cold storage. Potholeswere neveron the agendafor the BBMPforthe last fiveyears.------------- --- -------------PROMISES: INCREASE!) ROADSAFETY: Uniform pedestrian crossing; re­location of traders from roads; removetrans­formers and telephone junctionboxesfrom footpaths

REALITY: Despitea '1!'j1V5;~~~f

HighCourt order directingBBMPandBescomto re­move ali transformers andjunctIOnbOxesfrom thefootpaths - both agenciesnavewashedtheir handsoff the issueciting a lack ofspace

PROMISES:REVENUEEN·HANCEMENT: En­hancefunds from ~2,OOOcr to ~5,OOOcr with in-crease in allocation from state govt; providebarcode-basedlicensesto hoardings to notchup revenuefrom ~10cr to noo cr within fiveyears; cancel trade licenses,bring in onlineregistration system (ORS)to help traders.REALITY: Enhancedrevenueallocation willdepend onthe state government.ORSis al­readyavailable; BBMPhaddecided to ban allkind of hoardings but is nowspeaking aboutbarcode-basedones

Pralhlld Joshi. state BJPpresident

PROMISES: EFFECTIVESOLIDWASTEMANAGEMENT: Completegar­bage-processingunits at Kannamangala,Doddaballaupraand SubbarayanaPalya;es­tablish 140bio-methanisation plants; initiatewaste-segregation,processingat ward levels,providewet waste and drywaste bins in pub­lic places

PROMISES: DIGITAL BBMP: An up­graded BBMPmobile app to enablecitizens toaccessPalike's services frOmtheir homes;Palike'sOfficesto be completely digitised.REALITY: Services like birth anddeath cer­tificatejl, paying property tax andobtainingplansanctions are already,beingdoneonline.