The centre has earmarked incentives worth Rs 1,43,332 crore as financial incentive to 12 states for boosting power sector reforms for the year 2023-24. An amount of Rs 66,413 crore has been granted as additional borrowing for reforms undertaken in 2021-22 and 2022-23 in the power sector, the Ministry of Power said on Wednesday.
With a motive to increase operational and economic efficiency, and performance of power sector along with promoting a sustained increase in paid electricity consumption, the ministry said that the financial incentives will further allow additional borrowings.
“Under this initiative, an additional borrowing space of up to 0.5 percent of the Gross State Domestic Product (GSDP) is available to the States annually for a four-year period from 2021-22 to 2024-25. This additional financial window is dependent on implementation of specific reforms in the power sector by the States,” it added.
The ministry also made provisions for states that could not complete the reform process in 2021-22 and 2022-23 by availing the grant allocated for the year 2023-24.
With an amount of Rs 15,263 crore, West Bengal received the highest amount of additional borrowing permission for 2021-22 and 2022-23. It was followed by Rajasthan which received Rs 11,308 crore. However, Manipur and Mizoram were among the states which bagged the least share of additional borrowing with Rs 180 crore and Rs 192 crore respectively.
Further, the government has mandated a set of reforms for states to be eligible for the said incentives including Transparency in the reporting of financial affairs of power sector. The states are also required to comply with all legal and regulatory mandates along with assuming responsibility for losses of DISCOMs.
