Emphasizing that good competitive environment helps promote business dynamism, CCI chief Ashok Chawla said the lack of competition is hurting the growth of power sector. The Competition Commission of India (CCI) keeps a tab on unfair trade practices at the marketplace.
Speaking at the Delhi Economics Conclave, the CCI chairman said, the lack of competition is hurting the Indian power sector.
"Worst hurt is power (sector) where capacity shortages have caused constraints to economic growth." Chawla said.
"The control of the infrastructure, that is the electricity wires, by the dominant firm gives rise to access issues," Chawla added.
According to him, there is conflict of interest when content and carriage is with the same entity.
At present, power distribution companies (discoms) supply as well as manage network that provides electricity for residential and commercial purposes.
The government is working on a proposal where a power supplier would not manage the electricity distribution network.
Meanwhile, Chawla said the competition law has primarily three elements - to act against anti-competitive agreements, mergers and acquisitions, and curb abuse of dominant market position by entities.
So far, the commission has received more than 400 matters related to anti-competitive agreements and abuse of dominance.
With regard to M&As, around 150 proposals have been decided so far, he said.
Chawla also laid stress that good corporate governance is critical for ensuring fair competition.
Bad assets set to rise in infra sector in near-term
State-run India Infrastructure Finance Company today said that it expects a rise in non- performing assets in the near-term but health of the key sector is likely to improve going forward.
"We may see the bad assets ratio going up in the short-term, but things will be better than other institutions working in the same space," Executive Director Harsh Kumar Bhanwala told reporters here.
However, if issues plaguing various infra projects are addressed, things on the bad asset front will certainly improve, he said.
The public sector lender engaged in infra financing had a gross non-performing asset base of around 1.1 per cent by the end of first half of this fiscal. The firm, which has a restructured book of around Rs 3,000 crore as of now, has seen addition of Rs 600 crore in this account in the current financial year.
"We may add around Rs 400 crore of restructured book going ahead," Bhanwala said.
Bhanwala, here to participate in a road-show to promote India Infrastructure Finance Co's tax-free bond, said the issue is getting sound response. India Infrastructure Finance Co is presently in the market to raise up to Rs 3,000 crore through bond sale. It has received around Rs 1,850 crore as of now from investors.
Meanwhile, the infra financing firm said the first disbursements from its infra-debt fund would happen by the end of this month.
India Infrastructure Finance Co has disbursed around Rs 4,000 crore of credit by the end of November and has sanctioned around Rs 1,200 crore as of now.
"We are focusing on the refinancing and take out finance business to drive business growth as new sanctions have slowed down," Bhanwala said, adding India Infrastructure Finance Co would be able to maintain 30 per cent growth in loan book in fiscal 14.
Talking about take-out financing, he said the company sees the share from this segment rising from 10 per cent (around Rs 3,000 crore) of the total disbursed loan book size of Rs 30,000 crore to around 11-12 per cent by fiscal 14-end.
Talking about take-out financing, he said the company sees the share from this segment rising from 10 per cent (around Rs 3,000 crore) of the total disbursed loan book size of Rs 30,000 crore to around 11-12 per cent by fiscal 14-end.
India Infrastructure Finance Co said it is awaiting government nod to increase the loan tenure in case of take-out financing, a way of providing finance for longer duration projects.
Meanwhile, India Infrastructure Finance Co today said S B Nayar has taken over the charge of Chairman and Managing Director of the company.
Prior to this, he was managing director of of IFCI, India Infrastructure Finance Co said in a statement.
India Infrastructure Finance Co has disbursed around Rs 4,000 crore of credit by the end of November and has sanctioned around Rs 1,200 cr as of now.
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