Power sector: Big announcements but no extra funding; half-baked schemes

Centre's flagship scheme, KUSUM, which aims to provide solar-run irrigation pumps to farmers, has been allotted Rs 1,000 cr, or barely 0.01% of the total estimated outlay

The ambitious announcements for the power and renewable energy sector by the finance minister Nirmala Sitharaman seem to have very low financial backing. Clean energy, which is part of the welfare package of the BJP-ruled government under ‘Sabka Saath, Sabka Vikas, Sabka Vishwas’ got less than the expected allocation. 

The Centre’s flagship scheme, Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM), which aims to provide solar-run irrigation pumps to farmers, has been allotted Rs 1,000 crore, or barely 0.01 per cent of the total estimated outlay. KUSUM was first announced in the 2018-19 union budget and has an estimated outlay of Rs 1.4 trillion. The Budget has increased the scheme's target to connect two million farmers through off-grid solar pumps and 1.5 million grid-connected solar irrigation systems. It was earlier 1.75 million and one million, respectively. 

In an interaction, R K Singh, union minister for power, new & renewable energy said implementation of KUSUM is yet to be commenced. “Many states however floated similar schemes and are providing solar pumps,” he said. 

Budget of ministry of new and renewable energy has been increased nominally to Rs 5,701 crore. For power ministry, the budgetary allocation is same as last fiscal.

Power distribution sector, currently the most financially beleaguered link in the system, has received no separate scheme or budgetary allocation. There is a budget allocation of Rs 1 lakh to ministry of power under the head ‘Reform Linked Distribution Scheme’.

Similarly, smart metering has not received any budgetary allocation. FM announced 100 per cent smart prepaid metering in three years. Budgetary allocation to electrification schemes DDUGJY and IPDS has been increased to Rs 4,500 crore and Rs 5,300 crore for the year 2020-21.