Report of Indian Institute of Public Administration ... - Ministry of Power

6.6 Financial Restructuring Plans
National Report (Vol.-II)
Study on ‘Impact of Restructuring of SEBs’
6.6.2 The State Governments should establish medium term plans (if they are not
already in place) to target a gradual reduction and eventual elimination of the
subsidy (except for life-line support for clearly defined categories like BPL
families, etc.) over a defined period, and spell out clearly in their respective
Medium Term Expenditure Frameworks (MTEFs). The maximum subsidies
that would be made available to each restructured company, on a reducing
scale, during the defined period. FRPs should clearly identify the components
of financial assistance to be provided by the Government at the time of
restructuring as also during the transition period for stabilising the restructured
companies. Further, FRPs should be given wide publicity and should be
subjected to regular monitoring and review at the highest level every year.
6.6.3 The State Governments should be requested to include the FRPs in their
performance budgets and also highlight the progress in the Annual Plan
documents. Also, the Planning Commission should review the implementation
status of FRPs during the Annual Plan discussions of the respective States.
6.7 Managing the Reforms Process
6.7.3 The model adopted by the Government of Andhra Pradesh for managing the
reform may be followed after customisation, by other States. (Model No. II, as
mentioned at Para 4.6.4, Chapter- 4).
6.7.4 It is recommended that each State should establish/reactivate a high-level
Empowered Committee under the Chief Secretary of the State to guide and
direct the reform process. The Committee should not only meet regularly and
monitor the progress but also should bring out periodical ‘comprehensive
progress reports’ on the achievements and shortfalls and take remedial actions
in line with the agreed path. These reports should also be available in the public
domain.
6.8 Role of the Electricity Regulatory Commissions
6.8.2 (a) MYT frameworks have been developed and are under implementation in
some States. This is a good development and it is felt that MYT approach,
consistent with the EA, 2003 and NTP, should be adopted by all the ERCs
within the next two years, wherever this has not been adopted so far.
(b) A convention should be developed by the States, who are the owners of
majority of the Utilities in the country, that orders and directions issued
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