Finance Minister announces economic relief worth $40.82 billion for DISCOMs
The Union Finance Minister Nirmala Sitharaman has announced the 'Economic Relief from Pandemic' package and declared several sops for power distribution companies (DISCOMs), comprising Rs.3.03 trillion (~$40.82 billion) amount for reform-based result-linked power distribution program.
Previously this year, Sitharaman had presented the 2021-22 budget in the parliament. In her budget speech, Sitharaman had cited that the feasibility of DISCOMs was "a serious concern". A refurbished reforms-based result-linked power distribution sector program was anticipated to be launched with an expenditure of ₹3.05 trillion (~$41.92 billion) over five years.
As per the minister, the program would help DISCOMs in infrastructure creation, comprising prepaid smart meters, feeder separation, and up-gradation of systems tied to financial improvements.
The initiative reassures state-specific intervention in place of a one-size-fits-all drive. The participation is subject to pre-qualification criteria, comprising publication of audited financial reports, upfront liquidation of state government's dues or subsidy to DISCOMS, and non-creation of additional regulatory assets.
The program has plans to include 250 million smart meters, 10,000 feeders, and 400,000 km of low-tension overhead lines.
The program would unify the ongoing works of the Integrated Power Development Scheme (IPDS), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA).
Of the total ₹3.03 trillion (~$40.82 billion) outlay, the central share would be ₹976.31 billion (~$13.15 billion). In the meantime, the states have already been allowed additional borrowing for four years up to 0.5 percent of gross state domestic product annually – ₹1.05 trillion (~$14.14 billion) for 2021-22, subject to identified power sector reforms.