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Reforms Based and Results Linked Scheme: DISCOMs

  • 31 Jul 2021
  • 3 min read

Why in News

This Union cabinet has recently approved a Reforms-based and Results-linked, Revamped Distribution Sector Scheme.

  • The scheme requires that DISCOMs (Power Distribution Companies) submit detailed project reports (DPRs) on how they plan to reduce their operational losses to avail of funding.
  • Initially, the preliminary timeline given to discoms was 31st October 2021. It is now extended to 31st December 2021.

Key Points

  • Scheme Objectives:
    • Reduction of AT&C (aggregate technical & commercial) losses to pan-India levels of 12-15% by 2024-25.
    • Reduction of ACS-ARR gap (i.e. between the total cost of electricity and revenues generated from supplying power) to zero by 2024-25.
    • Developing institutional capabilities for modern discoms.
    • Improvement in the quality, reliability, and affordability of power supply to consumers through a financially sustainable and operationally efficient Distribution Sector.
    • Implementation of the Scheme would be based on the action plan worked out for each state rather than a “one-size-fits-all” approach.
  • Features:
    • Conditional Financial Assistance: The Scheme seeks to improve the operational efficiencies and financial sustainability of all DISCOMs (excluding Private Sector DISCOMs) by providing conditional financial assistance to DISCOMs for strengthening of supply infrastructure.
    • Subsuming of Various Schemes: It is proposed that the currently ongoing approved projects under the following Schemes would be subsumed:
    • Solarization of Agricultural Feeders: The Scheme has a major focus on improving electricity supply for the farmers and for providing daytime electricity to them through solarization of agricultural feeders.
      • This Scheme converges with the PM-KUSUM Scheme, which aims to solarize all feeders, and provide avenues for additional income to farmers.
    • Smart Metering: A key feature of the Scheme is to enable consumer empowerment by way of prepaid Smart metering to be implemented in Public-Private-Partnership (PPP) mode.
      • Smart meters would allow consumers to monitor their electricity consumption on a routine basis instead of monthly basis, which can help them in usage of electricity as per their own needs and in terms of the resources available.
      • It is proposed to install approximately 10 crore prepaid Smart Meters by December, 2023 in the first phase.
    • Leveraging Technology: Artificial Intelligence would be leveraged to prepare system generated energy accounting reports.
      • This will enable DISCOMs to take informed decisions on loss reduction, demand forecasting, Time of Day (ToD) tariff, Renewable Energy (RE) Integration and for other predictive analysis.

Source: IE

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