Budget 2021

Government announces financial assistance package for electricity distribution companies

Our Bureau New Delhi | Updated on February 01, 2021

The budget announced a financial assistance package of about ₹3.06 lakh crore for India’s ailing electricity distribution companies


The budget announced a financial assistance package of about ₹3.06 lakh crore for India’s ailing electricity distribution companies. The funds will be allotted on a results-based approach tied to the discoms’ financial improvement, union finance minister Nirmala Sitharaman said. The funds would be spent on infrastructure investment such as installation of prepaid and smart meters, feeder separation.

Presently, all discoms in the country, whether private or state-owned, are monopolies. A framework will be put in place to give choice to the customer in the form of at least two discoms in every market, she said.

Transmission assets of Power Grid Corporation will be rolled out under the asset monetisation programme.

Oil and gas

Ujjwala scheme of distribution of LPG cylinder connections will be expanded to include one crore additional households. The city gas distribution network will also be expanded to 100 additional districts in the next three years. In Jammu and Kashmir, a gas pipeline will be commissioned, the finance minister said.

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An independent gas transport system operator will be set up to regulate open-access non-discriminatory access to common carrier capacity in gas pipelines, she said.

The central government also aims to Bharat Petroleum in the next fiscal year, she added, while the pipelines of Indian Oil, Hindustan Petroleum, and GAIL will be rolled out under the asset monetization programme.

Renewable energy

The minister announced that a National Hydrogen Mission will be launched that will aim to scale up generation of hydrogen from green sources.

Solar Energy Corporation of India (SECI) and Indian Renewable Energy Development Agency (IREDA) will get an additional capital infusion of ₹1,000 crore and ₹1,500 crore, respectively.

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The minister also announced a hike in the import duty on solar inverters from 5 per cent to 20 per cent and solar lanterns from 5 per cent to 15 per cent, adding that this will give a boost to domestic manufacturing. She also announced that the government will introduce a phased manufacturing plan for solar cells and panels.

Published on February 01, 2021

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