Distribution is the most important link in the entire power sector value chain. As the only interface between utilities and consumers, it is the cash register for the entire sector. Under the Indian Constitution, power is a Concurrent subject and the responsibility for distribution and supply of power to rural and urban consumers rests with the states.
Government of India provides assistance to states through various Central Sector / centrally sponsored schemes for improving the distribution sector.
Integrated Power Development Scheme (IPDS)
Scheme approved on 20.11.2014 with a total outlay of Rs 32,612 crore which includes a budgetary support of Rs 25,354 crore from Govt. of India. The objectives of scheme are:
- Strengthening of sub-transmission and distribution networks in the urban areas;
- Metering of distribution transformers / feeders / consumers in the urban area.
- IT enablement of distribution sector and strengthening of distribution network
The component of IT enablement of distribution sector and strengthening of distribution network approved in June, 2013 in the form of RAPDRP for 12th and 13th Plans got subsumed in this scheme and approved scheme outlay of Rs 44,011 crore including a budgetary support of Rs 22,727 crore carried over to the new scheme of IPDS.
Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
Scheme approved on 20.11.2014 with a total outlay of Rs 44,033 crore which includes a budgetary support of Rs 33,453 crore from Govt. of India. The objectives of scheme are:
- Separation of agriculture and non-agriculture feeders
- Strengthening of sub-transmission and distribution networks in the rural areas;
- Metering of distribution transformers / feeders / consumers in the rural area.
- Rural Electrification
The component of Rural Electrification approved in August, 2013 in the form of RGGVY for 12th and 13th Plans got subsumed in this scheme and approved scheme cost of Rs 39275 crore including a budgetary support of Rs 35447crore carried over to the new scheme of DDUGJY.
National Electricity Fund (NEF)
To promote investment in the distribution sector, GoI has set up National Electricity Fund (Interest Subsidy Scheme) in March 2012 to provide interest subsidy on loans disbursed to the Distribution Companies (DISCOMS) – both in public and private sector, to improve the distribution network for areas not covered by RGGVY and R-APDRP project areas. The preconditions for eligibility are linked to certain reform measures taken by the States and the amount of interest subsidy is linked to the progress achieved in reforms linked parameters.
Financial Restructuring Scheme
GoI has notified the scheme for Financial Restructuring of State Distribution Companies (Discoms) in October 2012 for achieving their financial turnaround by restructuring their short term liabilities with support through a Transitional Finance Mechanism from Central Govt.