Power Secy: Grants to discoms primarily based on motion plan progress, all states on board

All states are on board for the Centre’s Rs 3.03-lakh-crore discom reform scheme, Power Secretary Alok Kumar advised The Indian Express, noting that the scheme had included learnings from earlier schemes geared toward reforming energy distribution, which is commonly termed the weak hyperlink of India’s energy sector.
Kumar famous that energy distribution firms (discoms) in most states and union territories had submitted their reform plans underneath the Revamped Distribution Sector Scheme (RDSS) and the federal government was more likely to sanction all plans which might be in accordance with the scheme tips by the top of the fiscal. The RDSS goals to scale back the mixture technical & business (AT&C) losses throughout discoms to 12-15 per cent and to scale back the hole between common value of energy provide and common income realised to zero by FY25. The targets for the RDSS are largely the identical because the targets underneath the Ujwal Discom Assurance Yojana (UDAY), that was launched by the NDA authorities in 2016.
“We feel this scheme has internalised all the learnings from the past schemes and we should get very good results,” Kumar stated, including that the scheme supplied flexibility to discoms to create their very own motion plans. The Power Secretary stated that whereas knowledge from discom efficiency underneath earlier schemes got here with a two-year lag, the RDSS requires disoms to submit audited figures on their efficiency yearly earlier than they get additional grants.
“… in earlier schemes, the disincentives or incentives were post-dated. That means after the schemes, if you reduce losses you will convert your loan to a grant or we’ll give you some incentives; but this (scheme) is concurrent. Every year, they (discoms) have to achieve progress on the action plan, they have to completely meet the pre-qualification condition. Only then they will get the grant for that year…”, Kumar famous.

The earlier discom reform scheme UDAY was unable to realize its meant targets. Average AT&C losses at discoms solely fell to twenty.9 per cent in FY20 from 23.7 per cent in FY16 whereas the common ACS-ARR hole fell to Rs 0.3 per unit (kilowatt-hour) from Rs 0.48 per unit in the identical interval.
Rating company Icra has estimated losses of about Rs 90,000 crore for the discom sector in FY21. However, the Centre has referred to as the estimate grossly overinflated however has not offered its personal estimate for losses within the fiscal.

Inadequate revision of tariffs by state discoms and excessive dues to discoms from states for the ability utilized by state departments and subsidies are key causes of money movement points confronted by discoms. Poor billing and assortment efficiency are additionally some points discoms face.
Kumar stated that the problems of well timed revision of electrical energy tariffs and fee of subsidies and dues by state governments had been pre-qualification circumstances underneath the RDSS, and that the Centre was going to stress pay as you go sensible metering to deal with problems with billing and assortment within the energy distribution sector.
India has excessive transmission and distribution (T&D) losses of 20.66 per cent as of FY19. Its T&D losses are considerably larger than that in different nations. Discoms will have the ability to entry funds underneath the RDSS to modernise their distribution infrastructure.