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.
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.
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.
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