The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has approved enhanced delegation of powers to PowerGrid under the existing Department of Public Enterprises guidelines dated 4th February 2010.
The decision raises the permissible equity investment limit for each subsidiary of Power Grid Corporation of India Limited from Rs. 5,000 crore to Rs. 7,500 crore, while retaining the overall cap of 15 per cent of the company’s net worth.
The move is intended to strengthen PowerGrid's capacity to invest in its core transmission business. As India’s largest transmission service provider, the company plays a central role in expanding the national grid and facilitating large-scale power evacuation. The revised investment threshold is expected to provide greater financial flexibility for undertaking capital-intensive projects through its subsidiaries.
The enhanced delegation comes at a time when India is targeting 500 GW of installed capacity from non-fossil fuel sources. Strengthening transmission infrastructure is considered essential to integrate renewable energy into the grid efficiently. By increasing the equity ceiling per subsidiary, the government aims to accelerate project execution and improve transmission readiness for renewable capacity addition across regions.
The approval also enables POWERGRID to participate more actively in bids for complex and high-value transmission projects, including Ultra High Voltage Alternating Current (UHVAC) and High Voltage Direct Current (HVDC) networks. These technologies are critical for transmitting electricity over long distances with reduced losses and improved stability.
In addition, the revised investment limit is expected to broaden competition under the Tariff-based Competitive Bidding (TBCB) framework used for selecting developers of major transmission projects. Greater participation from a financially strengthened PowerGrid could enhance competitive intensity, support efficient price discovery, and help ensure cost-effective project outcomes.
The government has indicated that the measure aligns with broader policy objectives of improving infrastructure investment efficiency and supporting clean energy goals. By retaining the cap of 15 per cent of net worth, fiscal discipline under Maharatna guidelines remains intact while offering operational flexibility. |
