Power reforms: States can borrow Rs 1.1 lakh crore extra in FY22

The promised grants beneath the scheme would get transformed into loans, until they met the parameters aimed toward decreasing their sticky losses, Union energy minister RK Singh had earlier informed FE.

Finance minister Nirmala Sitharaman mentioned on Monday that states have been allowed Rs 1,05,864 crore of further borrowing in FY22 as part of the credit score leeway introduced in Could 2020. “States have already been allowed further borrowing for 4 years (beginning FY22) as much as 0.5% of GSDP yearly topic to finishing up specified energy sector reforms,” the finance minister mentioned.

States have been requested to take steps to enhance the discoms’ company governance and improve intervention of IT-enabled infrastructure to decrease pilferage in energy provide to avail part of the elevated internet borrowing permitted by the federal government.

The discom reform scheme, the most recent in a collection of 4 over the past 20 years beginning with the accelerated energy growth and reforms programme (APDRP) unveiled in 2001, is seen to handle the core problems with billing-collection inefficiencies and pilferage that cripple the sector. Of the Rs 3.03-lakh-core monetary help, envisaged over 5 years beneath the scheme, the centre’s share can be Rs 97,631 crore.

The brand new scheme is contingent on the discoms committing to undertake structural reforms and infrastructure creation equivalent to feeder separation and good meters, to handle the core problems with billing-collection inefficiencies and pilferage that cripple the sector.

The promised grants beneath the scheme would get transformed into loans, until they met the parameters aimed toward decreasing their sticky losses, Union energy minister RK Singh had earlier informed FE.

The brand new scheme will subsume the prevailing Central authorities schemes for discoms — such because the Built-in Energy Growth Scheme, the Deen Dayal Upadhyaya Gram Jyoti Yojana and Saubhagya — which have comparable targets of family electrification, discount of losses via good metering, feeder separation and normal improve of distribution infrastructure.