Power ministry and states have welcomed Finance Minister's proposal to remove barriers such as cross-subsidy surcharges and a package of power sector tariff and structural reforms
Close on the heels of finance minister Nirmala Sitharaman's proposal to examine the performance of the Ujwal Discom Assurance Yojana (UDAY), the ministry of power and states together have decided to implement a slew of schemes in a bid to improve the viability of the loss-making distribution sector.
Power ministry sources told DNA, "The Centre and states will focus on the reduction of losses by distribution companies, improvement in collection efficiency, shift towards pre-paid metering and accounting for each unit electricity supplied.''
Further, the power ministry has asked states to reduce aggregate technical and commercial losses (AT&C) and cut unsustainable borrowings to bring in fiscal discipline. According to the ministry data, AT&C losses of the 27 electricity distribution companies in 26 states and UTs remained as high as 21.1% at the end of December 2018, down only 0.4 percentage point from the level recorded a year earlier. This is against the ministry's ambitious target of restricting AT&C losses to 15% or below by end of March 2019.
Maharashtra Electricity Regulatory Commission's former member Jayant Deo suggested that the Centre and states should work jointly to promote competition in the ailing distribution sector.
On the other hand, Maharashtra government's advisor to power sector Vishwas Pathak argued that for the betterment of discoms, the efforts initiated through UDAY need to be enhanced. "Power ministry has recently released the requirement of providing a letter of credit by distribution companies to all the generators. This is to ensure that distribution companies will make efforts to recover money from consumers," he noted.
NEW MEASURES
Power ministry and states have welcomed Finance Minister's proposal to remove barriers such as cross-subsidy surcharges and a package of power sector tariff and structural reforms.
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