₹22,000 cr for power linked with efficiency

Power and renewable energy got a ₹22,000 crore budgetary allocation for FY20-21.

While the allocation has largely been the same as in the last few years, the push towards Discom (power distribution company) reforms may lead to a shift in disbursals.

The second leg of the power distribution company reforms found mention in the Budget.

According to RK Singh, Minister of State (Independent Charge) for Power and New and Renewable Energy, the schemes will now be linked to the loss reduction performance of Discoms.

“The support under other schemes of the Ministry will be linked to the efficiency and loss reduction parameters.

“Till now, no State has said that it would not want to be a part of this scheme. A Cabinet approval of the scheme will be needed before the implementation,” Singh said.

Power to people

“Taking electricity to every household has been a major reform of the government. However, the distribution sector, particularly the Discoms are under financial stress,” Finance Minister Nirmala Sitharaman said in the Budget.

Sitharaman also said that the Centre intends to promote smart metering. She urged all the States and Union Territories to replace conventional electricity meters with pre-paid smart meters in the next three years.

Positive for generators

“Also, this would give consumers the freedom to choose the supplier and the rate as per their requirements.

“This is a very important step in reaching electricity to all people,” she added.

“The time-bound proposal to shift to pre-paid smart meters can truly help utilities improve cash collection as well as for consumers get a competitive power supply.

“This is, eventually, a positive for generators too who currently suffer delays of 6-8 months and are sitting on surplus capacity that could be sold if they had access to consumers,” Kameswara Rao, Leader - Government Reforms and Infrastructure Development, PwC India said.

“Further, it is proposed to expand the national gas grid from the present 16,200 km to 27,000 km.

“To deepen the gas markets in India, further reforms will be undertaken to facilitate transparent price discovery and also ease of transactions,” she said.

Source: Petroleum and Natural Gas Regulatory Board