At present, the central government has no presence in electricity distribution sectors except small distribution consultancy wings.
In a bid to ensure time-bound implementation of the Centre’s schemes, the government is planning to handhold state electricity distribution companies by setting up a National Electricity Distribution Company (NEDC).
As per an Economic Times report, the Central government has no presence in electricity distribution sector, except small distribution consultancy wings in Rural Electrification Corporation, Power Grid Corporation and NTPC.
“The Union government has [a] presence in all the power sector segments, be it financing, generation or transmission, but power distribution has always been out of focus and a laggard in the entire system," the report quoted a senior government official as saying.
Another official said that the company may not obtain a distribution license and will not interfere in the working of state power distribution companies.
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The official added that the consensus was that state distribution companies needed guidance and hand holding.
Experts were of the view that this is an important move by Prime Minister Narendra Modi to ensure his "power for all" promise is fulfilled ahead of the 2019 general elections.
The central government has promised to electrify all households in India with electricity before March 2019.
The government is also planning to circulate the draft Electricity Act for separation of power supply licenses from distribution infrastructure ownership. The bill proposes penalties on distribution companies for gratuitous load-shedding.