Budget 2021: Power discoms get second chance, Rs 3.05 trillion for reforms

Union Finance Minister Nirmala Sitharaman announced a Rs 3,05,982-crore outlay on Monday for a revamped reform scheme for struggling power distribution companies (discoms).

“Distribution companies across the country are monopolies, either government or private. There is a need to provide choice to consumers by promoting competition. A framework will be put in place to give consumers options to choose from among more than one distribution firm,” she said.

The ministry of power had, in 2018, suggested separation of the content and carriage business of discoms. The power infra was to be owned by discoms but the power was to be supplied by several players to induce competition and offer choice to consumers. The suggestion was removed from the subsequent proposed amendments in 2020 to the Electricity Act, 2003.