Mentor’s comment-
- https://indianexpress.com/
article/opinion/columns/ discoms-privatisation- bankruptcy-code-insolvency- resolution-7648042/ - In the intro, mention the recent clarification by the central government about triggering IBC proceeding against discoms.
- In the body, mention how state ownership of the discoms affects their operation due to political considerations such as charging lower tariffs, selectively enforcing against unauthorised use etc. In the next part mention implication of use of IBC against discoms. This will force the state governments to reform the financially stressed discoms or yield to privatisation efforts.
- Conclude by mentioning the challenges in the privatisation of discoms through IBC such as consumer mix and geography.
Id0000486418
Hello
See this question is very specific. Centre has allowed IBC proceedings to be triggered against the discoms because inspite of bail outs by centre the financial health of discoms haven’t improved. So, we need to mention the implications of using IBC proceedings on discoms.
You have analyzed generally the reasons behind poor health of discoms- use 2-3 lines for that..and then talk about IBC- privatisation through IBC would be difficult when a discom’s service area is more rural; freedom needs to given for tariff-setting to private parties but tariff is fixed by state electricity board, clarity is needed on the NCLT’s power to approve a discom resolution plan that proposes a tariff change- these issues need to be mentioned.
Then the mention a brief way forward- improvement in health of discoms is one, also you can say that state governments might be forced to reform the financially stressed discoms to avoid IBC proceedings,Insolvency of such utility service providers may need special treatment to ensure continuity of supply etc
Stick to what the question is asking in 10 mark questions- you can write generic things if you don’t have the particular content but that won’t fetch much marks–so try to work on the content.
Keep practicing. 🙂
Eco que
Aarti
Please enroll in the course and mention reference ID for further reviews.
Coming to the answer, you have diverted from the question–the question is asking implications of IBC proceedings on discoms(what are the issues, whether it is the right way forward etc) but you have mentioned why IBC proceedings have been triggered.
Reasons are fine, but keep it concise..mention post IBC scenario- privatisation through IBC would be difficult when a discom’s service area is more rural; freedom needs to given for tariff-setting to private parties but tariff is fixed by state electricity board, clarity is needed on the NCLT’s power to approve a discom resolution plan that proposes a tariff change.
Then, mention a brief way forward- improvement in health of discoms is one, also you can say that state governments might be forced to reform the financially stressed discoms to avoid IBC proceedings,Insolvency of such utility service providers may need special treatment to ensure continuity of supply etc
Go through the article tagged above- need to work a bit upon the content.
Keep practicing. 🙂
pay id-IOgte1ONIGA20L
Shubham
Decent attempt, intro is fine, you can mention that centre has clarified that IBC proceedings could be triggered against discoms.
Electricity generation in India is not asked, you can avoid, instead briefly you can mention issues with discoms.
Points under IBC proceedings are good but some good points have been skipped..successful IBC resolution would essentially mean privatisation so not clear what you mean by the 2nd point.
Some other points you can mention- privatisation through IBC would be difficult when a discom’s service area is more rural; freedom needs to given for tariff-setting to private parties but tariff is fixed by state electricity board, clarity is needed on the NCLT’s power to approve a discom resolution plan that proposes a tariff change.
Points 1,3 and 4 are fine. Before concluding can mention a brief way forward- state governments might be forced to reform the financially stressed discoms to avoid IBC proceedings,Insolvency of such utility service providers may need special treatment to ensure continuity of supply etc
Keep practicing. Read the article tagged above for content-building. 🙂
3.5/10