Important and useful changes to India's electricity law have been cleared by the Cabinet

The Union Cabinet has cleared changes in the Act. Union Power Minister Piyush Goyal earlier this week said the Bill would be tabled in Parliament soon


The amendments to the Electricity Act are likely to change the business dynamics for power distribution companies (discoms).
It will provide small consumers a choice of suppliers and allow distribution companies (discoms) to procure power from their own renewable energy plants to meet their renewable purchase obligation.
The Union Cabinet has cleared changes in the Act. Union Power Minister Piyush Goyal earlier this week said the Bill would be tabled in Parliament soon.
The features likely to be in the new Electricity Act include:
(a) Open access for over 1 Mw allowed – enabling inter-state transmission from surplus to deficit points
(b) Power supply business separate from setting infrastructure for supply – opens the market for ancillary business, increases competition
(c) Choice to consumer to select his power supplier – market driven tariffs, better supply and open ground for competition
(d) Time-bound distribution licence – pressure on discom to perform better
(e) promotion of clean energy and its adoption



Rajinder Kachroo

2 years ago

Open access will largely depend upon the infrastructure available at 33/11kV network. Most of the states have poor track record on the maintenance of this sub transmission and distribution lines. Lines need to be maintained and added in order to achieve free access successfully. It has been seen like in Mumbai that the management of utilities is not comfortable with this and have been creating hurdles through repeated court cases.


2 years ago

Great Steps taken, but some things we can not afford to ignore:

My comments for points:
a. Open access has so far being not much successful though lot has been talked about this since last couple of years. As few states are not allowing it to happen. I think analysis should be done on how Open access methodology has moved in last couple of years.

c. Its good that consumer can now choose his power supplier, but what if there are not enough of supplier. I think first supplier should be encouraged (cautiously)to enter into supplier side across different regions(not only restricted to one or other States)

Public Interest Exclusive
Should SUUTI sell its winners, Axis, ITC and L&T & hold the losers?

The government could meet its fiscal deficit targets by selling its Rs61,300 crore stake in ITC, L&T and Axis Bank. But these have turned out to be, by far, the government’s best investments. Shouldn’t it, following the sound investment advice, hold on to its winners and sell its losers first?


The government had planned to raise around Rs5,000 crore this fiscal year by selling stakes in companies including ITC, Larsen & Toubro and Axis Bank through the ETF route. Arvind Mayaram, former finance secretary at the finance ministry, had said that the government was considering floating an ETF to sell these shares held by SUUTI (Specified Undertaking of The Unit Trust of India). However, the government has put its plans on hold. There is a lot of criticism that the government is holding on to these shares while fiscal deficit is running high. Should it?


Well, the fact is that, the government’s accidental holdings in these companies have turned out to be outstanding investments and compared to its planned investments in public sector companies, from where it gets meagre dividends and hardly any price appreciation, except in a few glorious cases.


Smart investors have repeatedly advised traders and investors to follow a simple rule:

hold on to the winners; sell the losers. And ITC, L&T and Axis Bank are the stocks that are the big winners for the government. The big losers are in fact its shareholdings in various public sectors companies that need to be supported from time to time like Air India.


The government holds 11.27% in ITC worth Rs36,078 crore, 8.18% in L&T worth Rs11,700 crore and 11.66% in Axis Bank worth Rs13,510 crore. As on 12 December 2014, its stake in all three companies is worth approximately Rs61,300 crore. All these stakes are held indirectly by SUUTI, created in 2002 after the then UTI was wound up. In five years, the value has gained 157% or 21% annually from Rs23,850 crore as on 12 December 2009. Even over three years, the value is up 48% or 14% annually.


This is not the first time the government has planned to sell its stake in these top performers. The government has been mulling over this for the past few years. In 2011, the government had planned to pledge shareholdings of SUUTI to buy shares of state-owned companies in its attempts to meet the disinvestment target. That never happened. It finally got down selling approximately 9% in Axis Bank in March this year, bringing its holding down to 11.66%. The transaction was the first major divestment of shares held by SUUTI. If it had held on to that stake, the government would have been richer by Rs852 crore now. Then in 2014 it planned to sell its stake via the ETF route, like it did for other PSUs in March 2014. However, this too, seems to have been put off.


Ironically, the government got saddled with the shares of these professionally-run blue-chip firms while it rescued Unit Trust of India in 2002. UTI was split into UTI Mutual Fund and SUUTI, to bail out investors in Unit Scheme 1964. And now, these investments have delivered extraordinary returns.


In his maiden Budget in July, Finance Minister Arun Jaitley set a target of Rs58,425 crore to be raised through selling its stakes in state-run companies and part holdings in private companies. He would do well to sell many of hundreds of losers the in the government’s portfolio than these big winners.


Thai shares plunge most since 2008 as energy shares lead losses

As investors speculated this year’s rally was excessive relative to earnings prospects, the share prices in the Thai stock market suffered a decline


Thailand’s benchmark stock index suffered its biggest loss in 11 months, as energy companies declined. Crude oil prices have continued to fall. As investors speculated this year’s rally was excessive relative to earnings prospects, the share prices in the market suffered a decline.


The SET Index dropped 3.5% to 1,461.15 in Bangkok, taking a five-day decline to 8.2%.


The gauge briefly tumbled as much as 9.2% in afternoon trading before recovering most of its losses. PTT Exploration & Production Pcl (PTTEP) dropped for a seventh day, while its parent PTT Pcl (PTT), Thailand’s biggest energy company, tumbled 5.5%. The two stocks represent about 10% of the SET Index by weighting. Advanced Info Service Pcl declined 2.1%.


According to Nomura,Thai stocks have also been hit by foreign selling as investors pull out from emerging markets.


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