The Cabinet Committee on Economic Affairs (CCEA) on Wednesday allowed a five-year-long reform-based result-linked power distribution scheme worth Rs 3.03 lakh crore.
Briefing after the CCEA meet here, Power and New & Renewable Energy Minister R K Singh stated, "We have done a lot for power distribution reforms. It needs to be strengthened. Today, the Cabinet has approved the new scheme worth Rs 3.03 lakh crore, including Rs 97,000 crore central outlay."
He said the funds would be given to power distribution companies (discoms) to reinforce their system.
The Reform-Based Result-Linked Power Distribution Scheme was proclaimed in Budget
earlier this year. On Monday, Finance Minister Nirmala Sitharaman again announced the scheme as part of stimulus package post second wave of COVID-19, to increase the economy.
The revamped reforms-based result-linked power distribution scheme would offer fiscal assistance to discoms for infrastructure creation, up-gradation of system, capacity building and process improvement.
It offers state-specific intervention in place of ''one size fits all''.
For availing this scheme, the states would have to pre-qualify criteria like publication of audited financial reports, upfront liquidation of state government's dues/subsidy to discoms and non-creation of additional regulatory assets.
The scheme envisages 25 crore smart meters, 10,000 feeders, four lakh km of low-tension overhead lines strategic under the ongoing works under central government schemes.
The central schemes Integrated Power Development Scheme, Deen Dayal Upadhyaya Gram Jyoti Yojana, and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) would be merged.
Total allocation would be Rs 3,03,058 crore, including central government share of Rs 97,631 crore.
Sitharaman had also said on Monday that states have already been allowed an additional borrowing for four years up to 0.5 per cent of gross state domestic product yearly (Rs 1,05,864 crore for 2021-22), subject to carrying out specified power segment reforms.
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