New scheme for revival of discoms likely
THE DISCOMS ARE CASH-STRAPPED AND NEED SOME REVIVAL PACKAGE FOR MAINTAINING 24X7 POWER SUPPLY: OFFICIALS
NEW DELHI: The government may announce a new scheme for cash-strapped and loss-making electricity distribution utilities to reduce stress in the sector and achieve the goal of ‘24X7 Power for All’, a person familiar with the matter said.
“The discoms are cashstrapped and need some revival package for maintaining 24X7 power supply. A new scheme for revival of discoms has been deliberated upon, which may be announced in the General Budget on Monday,” the person said.
The Centre in November 2015 introduced the UDAY (Ujjwal DISCOM Assurance Yojana) scheme for the revival of the debt-laden discoms.
Under the scheme, discoms were envisaged to turn around financially within three years from signing agreements under it. In September 2019, power minister R K Singh had said that the ministry of power was working on UDAY 2.0 scheme. There were expectations that the scheme would be announced in the General Budget for 2020-21.
Though finance minister Nirmala Sitharaman in her budget speech last year had said that taking electricity to every household has been a major achievement but the distribution sector, particularly the discoms, were under financial stress. Further measures to reform discoms would be taken, she had said.
An official statement in March last year had also talked about a new scheme. “Decisions have also been taken in the Government to incentivise and enable states to undertake effective discom reforms; and link central sector schemes to institutional reforms. However, no new scheme regarding the above has been approved yet,” the release said.
“While the distribution utilities in Haryana have turned around under UDAY, some utilities have not been able to adhere to the reform paths envisaged under UDAY. The reasons for the same include tariffs not being reflective of costs; inadequate budgeting of subsidies; high aggregate technical and commercial (AT&C) losses etc,” the release had stated.
States were advised to clear their government department dues and ensure monthly clearance of the same; put in place a strict system of energy accounting; ensure timely payment of subsidy every month; begin a campaign to reduce AT&C (aggregate, technical and commercial) losses; and conversion of all consumer meters into smart prepaid meters/prepaid meters in a period of three years under the UDAY scheme.