Rs 3 lakh cr discom package to give power of choice to consumers

NEW DELHI: The Rs 3 lakh crore recharge plan for distribution sector in the Union budget and the proposed changes in the Electricity Act of 2003 together have the potential to give the power of choice to consumers by setting off competition among multiple suppliers vying for consumers and tying down funding for states to improvement in the health of their discoms.
The government’s game plan is simple: End distribution monopolies — state or private — by separating carrier and content to allow entry of multiple players. This will make consumers the king as they will be able to switch suppliers based on service or billing plans, just like in mobile telephony. Competition will also improve billing, revenue collection and overall operational efficiency.
The provisions of the Electricity (Amendment) Bill will address both issues and other factors responsible for poor service and financial health of discoms. Since recharge funds are to be linked to reforms and results achieved by states in the next five years, the budget brought a kaleidoscope of ongoing and proposed schemes to strengthen discoms, the weakest link in India’s power sector, on a single funding platform.
This will allow the Centre a bird’s eye view of the progress in states.