In yet another attempt to rescue the power distribution sector, the central government launched a new “reforms-based result-linked” scheme in this year’s Union Budget.
With an outlay of INR 3,03,758 crore over five years—including an estimated central grant of INR 97,631 crore—the scheme aims to create an efficient distribution sector for reliable power supply to consumers. It looks at bringing down the aggregate technical and commercial (AT&C) losses to 12-15%, and close the revenue gap by 2024-25, besides developing institutional capabilities through training and capacity-building measures.
Over the years, several structural reforms have been undertaken by the central and state governments to redress the problems of the distribution sector, the most recent being the Ujwal DISCOM Assurance Yojana (UDAY) in 2015.
However, despite these revival attempts, the sector continues to reel under heavy losses (total accumulated losses of distribution utilities stood at INR 4.88 lakh crore, as of 31st March 2019).