DBT in power to transfer subsidy into beneficiary A/C with discoms now

In a sharp deviation from the practised model of cash transfers, the government proposes to initiate direct benefit transfers (DBT) in the power sector by making payment of the subsidy into the accounts of consumers maintained by discoms and not directly into their bank accounts.

The amendments to the Electricity Act, 2003 (Electricity Amendment Bill, 2020) which is in last leg of finalisation and is with Law Ministry for vetting before being introduced in Parliament, has remodelled the DBT structure with states being asked subsidise tariffs for certain identified consumers by transferring the subsidy amount in advance into the electricity accounts of consumers maintained by discoms. The said provision will also be made in the new tariff policy which is also under finalisation.

What this change will do is that instead of getting subsidy amount into their accounts while paying electricity tariff at regulators’ determined rates based on cost of supply, a section of households,

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