New scheme for power distribution firms likely in Budget, says R K Singh

The minister said benefits under the new scheme would be disbursed if discoms stick to their trajectory for loss reduction

Union Power Minister R K Singh on Monday said a new scheme to revive the beleaguered state-owned power distribution companies (discoms) may be announced in the Union Budget. “We asked for a new scheme. We had discussions with the finance ministry. I am optimistic that the new scheme will find a place in budget,” Singh said. 

Business Standard first reported in December that a new power sector scheme aimed at better infrastructure, smart meters and private franchisee model for improving power supply in the states is likely to be launched with an estimated capital outlay of Rs 2-2.5 trillion.

The new scheme would replace UDAY, an earlier scheme meant for revival of discoms, that concludes in March 2020.

 Singh said the Centre should have one umbrella scheme instead of multiple schemes for the power sector, and states would have to reduce the losses of discoms to get the benefits under the scheme. The government is planning to integrate electrification programmes Deendayal Upadhyaya Gram Jyoti Yojana and Integrated Power Development Scheme with the new scheme.