For the purpose of determination of the tariff, the equity and outstanding debt shall be determined for the base year by the Commission taking into consideration the licensee’s proposals, previous years debt-equity details and other relevant factors. However, for any fresh capitalisation of assets, the Commission shall apply a debtequity ratio of 70:30 on the capitalized amount as approved by the Commission for each year of the control period:
Provided that where equity employed is in excess of 30%, the amount of equity for the purpose of tariff shall be limited to 30% and the balance amount shall be considered as loan. The interest rate applicable on the equity in excess of 30% treated as loan has been specified in regulation 0. Where actual equity employed is less than 30%, the actual equity shall be considered.