Govt proposes Rs 3.05 trn scheme to revive power distribution companies

Finance Minister Nirmala Sitharaman on Monday proposed a Rs 3.05 trillion scheme spread over five years to revive discoms and a framework to provide electricity consumers option to choose from service providers.

These two announcements are aimed at ensuring 24X7 Power for All as envisaged by the central government.

Last year, the government had enforced consumers rules for the power sector to ensure delivery of services.

But loss-making and cash-strapped discoms – which are mostly owned and run by state – are unable to buy sufficient power from generation firms to provide round the clock supply. Total outstanding dues of the discoms towards power generating firms stood at over Rs 1.35 trillion as of December 2020.