The new national power tariff policy approved by the Union Cabinet is a step forward in power reforms. The sector needs reforms in all areas of production, distribution and consumption. These are mutually connected and so reforms have to embrace all of them to be effective. Union Minister for Power Piyush Goyal has been active on reforms and has introduced policies that have shown positive results. The working of Coal India has improved, power shortages have reduced and renewable energy plans have got a boost in the last few months. The plan announced by the ministry to improve the finances of the discoms was well conceived. The new tariff policy may be seen as an extension of these reforms and if well implemented, it can help the sector to tone up. The policy is expected to benefit all stake-holders like generators, utilities and consumers. Power companies will benefit because they will now be allowed to pass costs arising out of changes in taxers, cesses and levies on to consumers. That can boost investor sentiment.
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