A Proposal to Bail-out the Tamil Nadu Electricity Board from Financial Fiasco

N Sankaralingam

The IUP Journal of Financial Economics, 2005, vol. III, issue 2, 56-72

Abstract: This paper examines the Tamil Nadu Electricity Board’s (TNEB) long-term financial problems, its impact on the projects and the action plan to circumvent the financial difficulties. Since the State Government has retreated from dispensing long-term loans, the Board has been bolstered by the public and financial institutions with loans and advances. This shift in stance of the State Government has created a short shift in project finance. Also it landed into the high cost of borrowings. In this condition, finding a nearest means at the cheapest rate to tide over the financial stress of the Board is considered imperative. With this aim, the consumers are approached with the following maxim. This is to understand the consumers’ mind in supporting the Board. “No Payment of Electricity Bill if you Deposit an Amount Equivalent to 100 Times of your Bimonthly Bill to the Electricity Supplier”. Despite the survey being carried in a miniature, the response obtained from the consumers is encouraging. It is expected that the proposal will work well like a mascot to overcome the financial problems of the Board if implemented earnestly. Since the proposal embarks on the commercial principles, the paper strongly urges the TNEB and other Boards as well to implement this plan

Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjfe:v:03:y:2005:i:2:p:56-72

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