The Government of India is planning to revive regional electricity retailers. The announcement is likely to be made on February 1, 2021 as part of the government’s budget for the year starting April 1.
January 29, 2021
India plans to spend around INR 3 lakh crore (USD 41 billion) on a new plan to revive regional electricity retailers, after a previous attempt failed to stem losses at the utilities.
As reported in a leading daily, the spending would be spread over a few years and is likely to be unveiled on February 1, 2021 as part of the government’s budget for the year starting April 1, 2021. The plan for carrying out reforms for reducing losses of state distribution utilities was sought by the nation’s power ministry and is under discussion.
PM Narendra Modi’s is focusing on turning around electricity distributors to ensure reliable power supplies, improving the financial health of generators and making the sector more attractive to foreign investors.
The spending would focus on upgrading infrastructure and technology of the ailing utilities to make them more efficient and reduce financial losses, according to the people. Under the plan, the federal government would provide annual grants to states that meet targets set by New Delhi.
The plan could include some specific measures such as separating power feeder grids for farmers and residential users, and installation of prepaid smart meters to stop pilferage and encourage timely payment, they said. It also plans to replace overhead cables with special insulated wires to prevent theft.
Also Read: Tata Power Takes Over Power Distribution in Western-Southern Odisha.
Electricity retailers are the weakest link in the country’s power supply chain, losing on an average about a fifth of their revenue because of technical and commercial reasons, including loss of power supplies through theft, poor transmission infrastructure and inefficient billing and collection.
The plan will be a modified version of an earlier program unveiled in 2015 to revive power distributors through restructuring of their debt. That attempt remained unsuccessful in making retailers profitable by March 2019.
