Govt plans $41 bn reform in Budget 2021 to revive ailing power discoms

India plans to spend 3 trillion rupees ($41 billion) on a new plan to revive regional electricity retailers, people with knowledge of the matter said, after a previous attempt failed to stem losses at the utilities.

The spending would be spread over a few years and is likely to be unveiled on Feb. 1 as part of the government’s budget for the year starting April 1, the people said, asking not to be identified as the proposal isn’t public. 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.

Prime Minister Narendra Modi’s government 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 combined loss at the nation’s power distribution companies, mostly controlled by provincial administrations, jumped 69% to 496.2 billion rupees in the year ended March 2019, the latest available data.

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.

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