Budget 2021: Over Rs 3 lakh cr reform scheme for DISCOMs, freedom of choice for power consumers

• The scheme will provide assistance to discoms for infrastructure creation, inclusion of prepaid smart metering, feeder separation, upgradation of systems etc, said the FM

• The Finance Minister said that the government will come up with a framework to provide more than one DISCOM choice to consumers

New Delhi: In order to overhaul the power distribution sector and improve the financial health of distribution companies (DISCOMs), the government has announced a scheme with an outlay of Rs 3,05,984 crore. "The viability of distribution companies is a serious concern. A revamped, reform-based, results-linked, power distribution sector scheme will be launched with an outlay of Rs 3,05,982 crore over five years. The scheme will provide assistance to discoms for infrastructure creation, inclusion of prepaid smart metering, feeder separation, upgradation of systems etc," said Finance Minister Nirmala Sitharaman while presenting Budget 2021 on Monday.

Govt to do away with DISCOM monopolies to give choices to consumers

While noting that DISCOMs across the country are monopolies, whether government-owned or private, the Finance Minister said that the government will come up with a framework to provide more than one choice to consumers. "The distribution companies across the country are monopolies, either government or private. There is a need to provide choice to the consumers by promoting competition. A framework will be put in place to give consumers alternatives to choose from among more than one distribution company," said Sitharaman.

ALSO READ: Govt notifies Electricity (Rights of Consumers) Rules, 2020. Here's what you should know

Sitharaman said the country has added 139 GW of installed capacity, connected 2.8 crore households and added 1.41 lakh ckt km of transmission lines in the last six years.

Commenting on the announcements made in the Budget 2021, Association of Power Producers (APP) director general Ashok Khurana said, "We welcome the announcement of the revamped reforms-based scheme for revival of the distribution segment (Rs 3,05,982 crore over 5 years). The Distribution segment has been the weakest link in the electrical system and providing assistance for infrastructure creation such as pre-paid smart metering and upgradation of systems, while tying the support to financial improvements, is vital for the sustainability of the entire power sector."

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)