Centre, states to implement DBT scheme in power sector
NEW DELHI: In what may lead to a major overhaul of India’s power sector, union and state governments have agreed to implement the direct benefits transfer (DBT) scheme in the electricity sector for better targeting of subsidies, power minister Raj Kumar Singh said.
India has been running the world’s largest direct benefits transfer programme, resulting in savings to the government exchequer.
“There is no such thing as free electricity. Any subsidy you want to give to any category of consumers, it has to be direct benefit transfer (DBT). That is something which we have agreed. We will bring it into the law,” Singh said at a press conference after a meeting of state power ministers.
Some of the schemes where DBT has been implemented for cash transfers include domestic cooking gas subsidy, scholarships, Mahatma Gandhi National Rural Employment Guarantee Scheme and pensions.
Singh has been championing DBT as a game changer for India’s electricity distribution sector which has been reeling under losses.
To make discoms more responsive, any disruption in electricity supplies post March 2019 will be penalised. Also, the discoms won’t be allowed to recoup more than 15% of their losses through any tariff increase post March 2019.
“We will put into the law that after March 2019, if there is any gratuitous load-shedding without any reason, there will be penalties on the discoms,” said Singh, who also heads the ministry of new and renewable energy.
The proposed tariff slabs rationalisation and limiting cross-subsidy to 20% will usher in efficiency and help improve India’s per capita power consumption of 1200 kilowatt hour, among the lowest in the world.
“In the amendments which we are bringing, we are providing that after March 2019, the losses which can be taken into account for fixation of tariff will be the actuals capped at 15%...That means if you have a loss of more than 15%, you can’t set that off by tariff. The philosophy behind this is that the consumers should not be asked to pay for our inefficiencies,” Singh added.
To improve efficiency and reduce losses, the union and the state governments will be leveraging technology for 100% metering and doing away with any human interface in consumer facing functions such as metering, billing and collections.
“We have a vision to provide 24X7 power to all. We have agreed that the time frame for that is March 2019. This has been under talks for some time now. With all the states, the road map has been worked out and now we will make it a legal obligation,” said Singh.
These steps will require amendments in the Electricity Act of 2003.
Electricity tariff slab rationalisation to make them uniform across the country will help in reduction of cross-subsidies borne by the industry, and make tariffs more competitive for businesses, thereby pushing the government’s Make in India drive.