The shaky finances of state electricity boards (SEBs) are a problem not only for the power sector, but even financial institutions and banks. Loans from these institutions make up 72% of all capital employed by SEBs in fiscal 2010. At the same time, the share of state government loans has fallen. What’s worse, over half the exposure of foreign investors/banks to these distribution firms is in the bottom five states, which are reluctant to hike tariffs and account for 80% of all SEB losses.
Also See | Dim and dimmer (PDF)
Graphic by Ahmed Raza Khan/Mint