Applications for the LAMP Fellowship 2025-26 will open soon. Sign up here to be notified when the dates are announced.
Reports suggest that a debt restructuring plan is being prepared for power distribution companies (discoms) in seven states - Uttar Pradesh, Punjab, Rajasthan, Haryana, Andhra Pradesh, Tamil Nadu and Madhya Pradesh. According to some estimates, the combined outstanding debt for discoms is Rs 2 lakh crore. Discoms have been facing heavy losses. According to a Planning Commission Report, the cost of supplying electricity increased at a rate of 7.4 per cent annually between 1998-99 and 2009-10. The average tariff has also increased at an annual rate of 7.1 per cent over the same period. However, the report shows that the average tariff per unit of electricity has consistently been much lower than average cost of supply per unit. Between 2007-08 and 2011-12, the gap between average cost and average tariff per unit of electricity was between 20 and 30 per cent of costs.
Average cost and average tariff per unit of electricity (Rs per kWh)
Year |
Unit cost |
Average tariff per unit |
Gap between cost and tariff |
Gap as percentage of unit cost |
2007-08 |
4.04 |
3.06 |
0.98 |
24% |
2008-09 |
4.6 |
3.26 |
1.34 |
29% |
2009-10 |
4.76 |
3.33 |
1.43 |
30% |
2010-11 |
4.84 |
3.57 |
1.27 |
26% |
2011-12 |
4.87 |
3.8 |
1.07 |
22% |
Source: “Annual Report 2011-12 on the Working of State Power Utilities and Electricity Departments”, Planning Commission State discoms have been losing money due to higher costs than revenues, as well as high transmission and distribution (T&D) losses. The commercial losses for discoms in India (after including subsidies) increased from Rs 16,666 crore in 2007-08 to Rs 37,836 crore in 2011-12. Reports suggest that the restructuring plan being prepared will be worth Rs 1.2 lakh crore in short-term liabilities. Half of the proposed amount would be issued as bonds by the discoms, backed by a state government guarantee. Banks and financial institutions would reschedule the remaining Rs 60,000 crore of debt, with a moratorium of three years on payment of the principal amount. State governments that adopt the financial restructuring plan would not recover any loans given to discoms before they start showing profits. Under a proposed transition finance mechanism, the central government would reimburse 25 per cent of the principal amount of bonds to states that fully implement the plan. Also, states that achieve a reduction in T&D losses above a targeted level in three years may be given grants. Newspaper reports also suggest that states will have to prepare plans for eliminating the gap between the average cost and average tariff per unit of electricity.
On June 6, 2022, the Ministry of Electronics and Information Technology released the draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules, 2021) for public feedback. The IT Rules were notified on February 25, 2021, under the Information Technology Act, 2000 (IT Act). The Ministry noted that there is a need to amend the Rules to keep up with the challenges and gaps emerging in an expanding digital ecosystem. In this blog post, we give a brief background to the IT Rules, 2021 and explain the key proposed changes to the Rules.
Background to the IT Rules, 2021
The IT Act exempts intermediaries from liability for user-generated content on their platform provided they meet certain due diligence requirements. Intermediaries are entities that store or transmit data on behalf of other persons and include telecom and internet service providers, online marketplaces, search engines, and social media sites. IT Rules specify the due diligence requirements for the intermediaries. These include: (i) informing users about rules and regulations, privacy policy, and terms and conditions for usage of its services, including types of content which are prohibited, (ii) expeditiously taking down content upon an order from the government or courts, (iii) providing a grievance redressal mechanism to resolve complaints from users about violation of Rules, and (iv) enabling identification of the first originator of the information on its platform under certain conditions. It also specifies a framework for content regulation of online publishers of news and current affairs and curated audio-visual content. For an analysis of the IT Rules 2021 please see here.
Key changes proposed to the IT Rules 2021
Key changes proposed by the draft amendments are as follows:
Comments on the draft amendments are invited until July 6, 2022.