Revamped Distribution Sector Scheme

News: The scheme was recently approved by the Union Cabinet.

Details:

  • It is a reforms-based and results-linked scheme. It seeks to improve the operational efficiencies and financial sustainability of all DISCOMs/Power Departments excluding Private Sector DISCOMs.
  • The scheme envisages the provision of conditional financial assistance to DISCOMs for strengthening supply infrastructure. The assistance will be based on meeting pre-qualifying criteria as well as upon the achievement of basic minimum benchmarks by the DISCOM.
  • The scheme involves a compulsory smart metering ecosystem across the distribution sector—starting from electricity feeders to the consumer level, including in about 250 million households.
  • Scheme also focuses on funding for feeder segregation for unsegregated feeders.
  • The Scheme has a major focus on improving electricity supply for the farmers and for providing daytime electricity to them through solarization of agricultural feeders.
  • Existing power sector reforms schemes such as Integrated Power Development Scheme, Deen Dayal Upadhyaya Gram Jyoti Yojana, and Pradhan Mantri Sahaj Bijli Har Ghar Yojana will be merged into this umbrella program.
  • Each state would have its own action plan for implementation of the scheme rather than a ‘one-size-fits-all’ approach. Nodal agencies for the scheme’s implementation are Rural Electrification Corporation (REC) Limited and Power Finance Corporation (PFC).
  • Objectives of the scheme:
    • Reduction of average aggregate technical and commercial loss to pan-India levels of 12-15% by 2024-25.
    • Narrow the deficit between the cost of electricity and the price at which it is supplied to zero by 2024-25.
    • Developing institutional capabilities for modern DISCOMs.
    • Improvement in the quality, reliability, and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector.