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Revamped Distribution Sector Scheme

Revamped Distribution Sector Scheme- Relevance for UPSC Exam

  • GS Paper 2: Governance, Administration and Challenges- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

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Revamped Distribution Sector Scheme in News

  • During ‘Ujjwal Bharat Ujjwal Bhavishya – Power @2047’ Program, Indian Prime Minister launched the Power Sector’s Revamped Distribution Sector Scheme.
  • He also dedicated and laid the foundation stone of various green energy projects of NTPC.

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Revamped Distribution Sector Scheme

  • About: The flagship Revamped Distribution Sector Scheme is aimed at improving the operational efficiencies and financial sustainability of the DISCOMs and Power Department.
  • Implementing Ministry: Revamped Distribution Sector Scheme is being implemented under administrative control of Ministry of Power.
  • Funding: Revamped Distribution Sector Scheme will be implemented with an outlay of over Rs. 3 lakh crore over a period of five years from FY 2021-22.
    • The outlay includes an estimated Government Budgetary Support (GBS) of Rs 97,631 Crore.
  • Components: The Revamped Distribution Sector Scheme has the following components-
    • Part A – Financial support for Prepaid Smart Metering & System Metering and up-gradation of the Distribution Infrastructure.
    • Part B – Training & Capacity Building and other Enabling & Supporting Activities.


Revamped Distribution Sector Scheme- Key Objectives

  • The scheme aims to provide financial assistance to DISCOMs for-
    • Modernization and strengthening of distribution infrastructure,
    • Focussing on the improvement of the reliability and quality of supply to end consumers.
  • It also aims to improve the operational efficiencies and financial sustainability of all state-sector DISCOMs and Power Departments by reducing-
    • The AT&C (Aggregate Technical and Commercial) losses to pan-India levels of 12-15% and
    • The ACS-ARR (Average Cost of Supply-Average Revenue Realized) gap to zero by 2024-25.


Key Features of the Revamped Distribution Sector Scheme

Key features of the revamped Distribution Sector Scheme are mentioned below-

  • Prepaid Smart Metering to be prioritized for
    • 500 AMRUT cities, with AT&C Losses > 15%
    • All Union Territories
    • MSMEs, Industrial and Commercial consumers
    • All Government offices at the Block level and above
    • Other areas with high losses
  • Prepaid Smart metering for remaining consumers and areas is proposed to be taken up by the respective DISCOMs in a phased manner.
  • Prepaid Smart metering and system metering are proposed to be implemented through PPP on TOTEX (CAPEX+OPEX) mode.
  • Part A of the scheme also provides financial assistance to DISCOMs for-
    • Infrastructure creation and
    • Undertaking reforms to achieve the desired results towards improvement in operational efficiency and financial sustainability.
  • Provision of feeder segregation for unsegregated feeders. Thereafter these feeders are to be solarized under KUSUM – leading to cheap/ free daytime power for irrigation.
  • The pre-qualifying criteria need to be mandatorily met with the DISCOMs before they can be evaluated based on the Result Evaluation Matrix.
    • Thereafter, performance based on Result Evaluation Matrix shall form the basis for the release of funds under the scheme.
  • For Prepaid Smart metering, a grant of Rs 900 or 15% of the cost per consumer meter (whichever is lower), shall be available for “Other than Special Category” States.
    • For “Special Category” States, the grant of Rs 1350 or 22.5% of the cost per consumer (whichever is lower) shall be available.
  • To incentivize the States/UTs to fast-track installation of prepaid Smart Meters by December 2023, an additional incentive of 7.5% of the cost per consumer meter or Rs. 450 (whichever is lower) shall be available.
    • For “Special Category” States the additional incentive shall be 11.25% or Rs. 675 per consumer meter (whichever is lower).
  • For works other than smart metering, maximum financial assistance given to DISCOMs of “Other than Special Category” States will be 60% of the approved cost.
    • For the DISCOMs in special category states, the maximum financial assistance will be 90% of the approved cost.

India’s Largest Floating Solar Power Project Commissioned

India’s Largest Floating Solar Power Project Commissioned

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