FM Nirmala Sitharaman Announces Outlay Of Rs 3.03 Lakh Crore For Reform-Based Result-Linked Power Distribution Scheme  

Finance Minister Nirmala Sitharaman on Monday announced the allocation of Rs 3.03 lakh crore for a revamped reform-based result-linked power distribution scheme.

The Scheme provides assistance to DISCOMS for infrastructure creation, including pre-paid smart metering and feeder separation, up-gradation of systems, etc. tied to financial improvements. The programme entails state-specific intervention in place of a "one size fits all" approach.

Participation is contingent to pre-qualification criteria like the publication of audited financial reports, upfront liquidation of state government's dues/subsidy to DISCOMS and non-creation of additional regulatory assets, FM Sitharaman said.

Notably, out of the total outlay, the Centre’s share would be Rs 97,631 crore.

The finance minister announced that 25 crore smart meters, 10,000 feeders and 4 lakh kilometre of LT overhead lines have been planned. Additionally, she stated that the ongoing work under the IPDS, DDUGJY and SAUBHAGYA scheme will be merged.

She further informed that states have already been allowed additional borrowing for four years up to 0.5 percent of the Gross State Domestic Product (GSDP) annually (Rs 1.05 lakh crore for FY22) subject to carrying out specified power sector reforms.

The scheme was announced by Sitharaman in her budget speech of 2021-22 where she expressed serious concern over the viability of power distribution companies.

In her budget speech, FM Sitharaman had also pointed towards the monopolies of distribution companies across the country and proposed to put in place a competitive framework to give consumers alternatives to choose from among more than one distribution company.