Stimulus package: Rs 3 lakh crore result-linked scheme for power companies

NEW DELHI:  Union Minister of Finance Nirmala Sitharaman announced on Monday an allocation of Rs 3.03 lakh crore towards a revamped reform-based result-linked power distribution scheme.

The announcement came as part of the government’s fresh stimulus package for the economy, which was announced by the finance minister.

According to the presentation, the Centre’s share in the allocation towards the scheme will be Rs 97,631 crore. 

The scheme, a similar announcement for which was made in the Union Budget for FY2021-22 in February this year, is aimed at providing financial assistance to power distribution companies to help them in infrastructure creation, up-gradation of systems, capacity building, and process improvement, Sitharaman said.

The scheme will put forward state-specific intervention in place of a “one size fits all” approach. 

“However, participation in the scheme is contingent to pre-qualification criteria such as the publication of audited financial reports, upfront liquidation of state government’s dues/subsidy to DISCOMS and non-creation of additional regulatory assets,” Sitharaman said.

Companies and discoms that do not meet the criteria, will not get support under the scheme. 

The most recent updates on the power ministry’s PRAAPTI portal, which tracks the payment dues of India’s power distribution companies, shows that discoms have cleared a massive Rs 33,720 crore of overdues, bringing the total down from Rs 1,01,432 crore at the end of February 2021 to Rs 89,982 crore at the end of March 2021. Excluding payables which are disputed, overdues fell from Rs 84,478 crore to Rs 67,417 crore.