Budget 2021: A few more miles left to be covered in the energy sector
The Union Budget of 2021-22 has been met with a general sense of optimism but also a few reservations. One such review is that is that the budget is public sector centric and the private sector has largely been left to fend for itself. Whilst participants in the power sector may have even more reason to justify this sentiment, there have been certain welcome announcements. It will be crucial to see how these measures are implemented.
The key announcements are as follows:
Distribution Reform
– DISCOM reform has been identified as a major agenda item for the present Government and has seen significant focus. It has been proposed that a revamped reforms based result linked power distribution sector scheme will be launched with an outlay of INR 3,05,984 crores over a period of five years to provide assistance to DISCOMS for infrastructure creation including pre-paid smart metering and feeder separation, upgradation of systems which are connected with financial improvements. This is a welcome step to curb mounting aggregate technical and commercial losses (AT&C Losses).
– The Finance Minister has also proposed that a framework will be put in place to give consumers the power to decide their choice of supply from among more than one distribution companies (DISCOMS).
