Up to 600 million people were left without electricity in India this summer in one of the worst blackouts in history. Anupam Nath / AP Photo
Up to 600 million people were left without electricity in India this summer in one of the worst blackouts in history. Anupam Nath / AP Photo

Lifeline for Indian power sector



Mumbai // India's government has approved a restructuring package for state electricity distribution companies that are struggling under losses of 2.46 trillion rupees (Dh169bn), in the latest of a series of measures to boost economic growth.

The scheme is much needed by the ailing industry, with the severity of the problems in the country's power infrastructure highlighted when more than 600 million people were left without electricity this summer, in one of the biggest blackouts in history.

"The cabinet approval for restructuring is nothing short of a lifeline for state distribution companies," said Pawan Agrawal, a senior director at Crisil Ratings.

"In the short term, this will ensure the resumption of much-needed flow of credit for distribution companies, and as a result, provide a boost to the entire supply chain of equipment and power suppliers as well as lenders to the sectors. In addition, there will be clear structural positives that should enhance the longer-term viability of the distribution sector, improving their profitability and restoring lenders' confidence in them."

The accumulated losses of the state power distribution companies are estimated at about 1.9tn rupees as of the end of March last year, the government said.

Veerappa Moily, India's power minister, said Indian power distributors losses had reached 2.46tn rupees by the end of March this year, Reuters reported yesterday.

Mismanagement and selling power at a discount are factors that have hampered the sector, analysts say.

Under the voluntary restructuring scheme, state governments would take over half of the debts of power distribution companies, which would then be issued as bonds to lenders, backed by state government guarantee.

The rest of the debt would be restructured by banks, which would reschedule loans and allow a moratorium on repayments, the government said.

The move followed a flurry or reforms unleashed this month by the prime minister Manmohan Singh's government, including allowing up to 51 per cent foreign direct investment in the multi-brand retail sector and a reduction in fuel subsidies.

The government had previously been widely accused of dithering on big-ticket economic reforms that would help to boost investment and reduce India's fiscal deficit. Economists had cut economic growth forecasts for India in recent months, citing "policy paralysis", while ratings firms warned that India could face being downgraded to junk status without action.

But the recent announcements, while popular with many investors and companies, have been met with disapproval from shopkeepers and many politicians, who argue that the reforms will harm ordinary Indians.

Challenges remain with the restructuring plan for the power sector, too, analysts noted.

Dhananjay Sinha, the co-head of institutional research at Emkay Financial Services, said that the move could just be "a stopgap response".

A "pitfall for banks could be the transitional finance mechanism, which requires banks to finance interim losses during [the] three-year moratorium period", said Mr Sinha. "Given the poor track record of [state electricity boards] on the measures of the last bailout package [in 2001 and 2002], one can not rule out reemergence of the revenue gap funding after the moratorium period also."

Power companies are still expected to sell electricity cheaply.

"The desired impact of this restructuring will not be realised unless a broad-based political consensus is achieved to implement the much-needed tariff hikes, a timely and adequate financial support is provided by the state governments and the discipline of the regulatory process and disclosures is enhanced," said Mr Agrawal.

"In addition, some flexibility may be needed by state governments to accommodate the additional debt into their fiscal space."

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
On sale: Now

What is cyberbullying?

Cyberbullying or online bullying could take many forms such as sending unkind or rude messages to someone, socially isolating people from groups, sharing embarrassing pictures of them, or spreading rumors about them.

Cyberbullying can take place on various platforms such as messages, on social media, on group chats, or games.

Parents should watch out for behavioural changes in their children.

When children are being bullied they they may be feel embarrassed and isolated, so parents should watch out for signs of signs of depression and anxiety

Kill

Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

Sukuk

An Islamic bond structured in a way to generate returns without violating Sharia strictures on prohibition of interest.

UAE athletes heading to Paris 2024

Equestrian
Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).


Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).


Cycling
Safia Al Sayegh (women's road race).

Swimming
Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics
Maryam Mohammed Al Farsi (women's 100 metres).

Honeymoonish

Director: Elie El Samaan

Starring: Nour Al Ghandour, Mahmoud Boushahri

Rating: 3/5

Director: Nag Ashwin

Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★

How to increase your savings
  • Have a plan for your savings.
  • Decide on your emergency fund target and once that's achieved, assign your savings to another financial goal such as saving for a house or investing for retirement.
  • Decide on a financial goal that is important to you and put your savings to work for you.
  • It's important to have a purpose for your savings as it helps to keep you motivated to continue while also reducing the temptation to spend your savings. 

- Carol Glynn, founder of Conscious Finance Coaching

 

 

RESULT

Valencia 3

Kevin Gameiro 21', 51'

Ferran Torres 67'

Atlanta 4

Josip Llicic 3' (P), 43' (P), 71', 82'