UT discom privatisation a good move, but impact may be limited

NEW DELHI: Finance Minister Nirmala Sitharaman’s announcement on Saturday that the Centre will privatise all power distribution companies in Union Territories (UT) has been welcomed by industry experts. However, aside from serving as a recent model for state governments to emulate, analysts note the move will have little immediate impact on the larger power distribution market. “This will lead to better service to consumers and improve operational and financial efficiency in distribution,” Sitharaman said in her presentation.

She also said that a new tariff policy focusing on improving consumer rights, promoting industry and ensuring the sustainability of the sector would be released soon. Power ministry officials have stated multiple times over the past few months that a new tariff policy was in the works and would be released soon. The privatisation of discoms is a policy that has long been mooted at the power ministry.