Cabinet approves Rs 3.03 Cr reform scheme for power discom sector

New Delhi, Jun30 (Mayank Nigam) The Union Cabinet on Wednesday approved a reforms-based and results-linked, revamped distribution of power sector scheme. The scheme seeks to improve the operational efficiencies and financial sustainability of all discoms and power departments excluding private sector discoms by providing conditional financial assistance to them for strengthening of supply infrastructure. The Scheme will have an outlay of Rs3,03,758 crore with an estimated Gross Budgetary Support (GBS) from Central Government of Rs.97,631 crore.

It is proposed that the currently ongoing approved projects under the Schemes of IPDS, DDUGJY along with PMDP-2015 for the Union Territories of Jammu & Kashmir (J&K) and Ladakh would be subsumed in this scheme, and the savings of their GBS of about Rs. 17000 crore, would be part of the total outlay of the Revamped Distribution Sector Scheme under the existing terms and conditions till their sunset on 31″ March, 2022. The funds under these Schemes would be available for the identified projects under IPDS and for the approved ongoing projects under Prime Minister’s Development Program (PMDP) for the Union Territories of J&K and Ladakh under IPDS and DDUGJY till 31 March, 2023. The assistance will be based on meeting pre-qualifying criteria as well as upon achievement of basic minimum benchmarks by the DISCOM evaluated on the basis of agreed evaluation framework tied to financial improvements. Implementation of the Scheme would be based on the action plan worked out for each state rather than a “one-size-fits-all” approach.

The Revamped Distribution Sector Scheme aims to improve operational efficiencies and financial sustainability, by providing result-linked financial assistance to DISCOMs for strengthening of supply infrastructure based on meeting pre-qualifying criteria and achieving basic minimum benchmarks. The Scheme would be available till the year 2025-26. Rural Electrification Corporation and Power Finance Corporation have been nominated as nodal agencies for facilitating implementation of the Scheme.