He clarified that the cess to create the National Power Development Fund would be on power generated and not consumed to reduce the burden on consumers and to ensure efficient collection of funds. He outlined a series of time-bound action programmes which will ensure that creation of fresh capacity would not be affected. These include the fresh generation by NTPC, NHPC and a transmission grid by Power Grid and private investors.

Elaborating on the mega power policy for the private sector, Kumaramanglam said that a Power Trading Company would be set up to purchase power from the private generators. The company will also bear the risk of payingthe generating companies. The funds would be recovered from the SEB through a agreement with the Reserve Bank of India. The RBI would deduct the central funds from states in case of default. The details of the operations of the Power Trading Company would be decided by the Standing Independent Group later in the month. It will also decide the extent of participation by NTPC, Power Grid and other PSUs.

Other facilities to be given to mega projects would be duty free import of capital equipment and tax exemptions. These will reduce tariffs and help the consumers and SEBS, the minister said. Kumaramangalam said the securitisation procedures to retrieve the colossal dues from state electricity boards (SEBs) will soon be placed before the Union cabinet for clearance.

The minister did not elaborate on the exact procedures, but said that out of a total outstanding of Rs 22,000 crore, Rs 10,500 crore would be recovered from the SEBs this year. Kumaramangalam said that the government would soon come out with anotification which would facilitate non requirement of techno-economic clearance (TEC) from Central Electricity Authority (CEA) for projects costing about Rs 5,000 crore.