This Scheme was approved on 20.11.2014 with a total outlay of Rs 44,033 crore which included a budgetary support of Rs 33,453 crore from Govt. of India. The objectives of the scheme are:
- Separation of agriculture and non-agriculture feeders
- Strengthening of sub-transmission and distribution networks in the rural areas;
- Metering of distribution transformers / feeders / consumers in the rural area.
- Rural Electrification
The component of Rural Electrification approved in August, 2013 in the form of RGGVY for 12th and 13th Plans got subsumed in this scheme and approved scheme cost of Rs 39275 crore including a budgetary support of Rs 35447crore carried over to the new scheme of DDUGJY.
National Electricity Fund (NEF)
To promote investment in the distribution sector, the GoI has set up National Electricity Fund (Interest Subsidy Scheme) in March 2012 to provide interest subsidy on loans disbursed to the Distribution Companies (DISCOMS) – both in public and private sector, to improve the distribution network for areas not covered by RGGVY and R-APDRP project areas. The preconditions for eligibility are linked to certain reform measures taken by the States and the amount of interest subsidy is linked to the progress achieved in reforms linked parameters.
Financial Restructuring Scheme
The GoI has notified the scheme for Financial Restructuring of State Distribution Companies (Discoms) in October 2012 for achieving their financial turnaround by restructuring their short term liabilities with support through a Transitional Finance Mechanism from Central Govt.
Power Sector Reforms
The over dependence on private sector for the reforms in power sector is not good for the country and the country needs a balanced approach.
After more than two decades of power sector reforms in India it has failed to ensure adequate supply of electricity in the country, bring down AT&C losses, make the power sector vibrant, viable and profitable, bring in the benefits of competition in power generation and distribution by way of reduced tariff and better consumer services.
The very purpose of Electricity Act 2003 was to reduce the losses in Power sector, improve the financial health of the sector & reduce the subsidy burden of Government. But due to faulty execution of policies the contrary has happened. The financial health of power sector has further deteriorated & Government is now even subsidizing private DISCOMS. What is more serious is that due to continued wrong energy policies banking sector may collapse under the burden of non-performing assets being generated by Power Sector.
The Electricity Act 2003 envisaged that with the setting up of independent regulators and distancing of government from tariff matters, the state distribution utilities would be able to achieve financial viability and there by restore the financial health of the power sector.
While state Discoms resorted to loans from the banks and financial institutions to meet operational deficits, it has now resulted in a position of debt trap for many of the state power utilities.
While financial restructuring plan (FRP) is being imposed on states which is forcing the states for introducing privatisation for the reduction of AT&C losses through introduction of input based distribution franchise.
The concept of achieving low tariffs through competitive bidding in Ultra Mega Power Projects (UMPP) has been completely defeated by the changes made in terms of reference after award of contract by giving various concessions to successful bidders. Private sector companies have been successful in getting the tariff revised from CERC despite signing of MOU’s with state utilities for long term supply contracts on one pretext or other. While the tariff policy of Government of India stressed for setting up of new projects under competitive bidding, several state governments have gone in for MOU route of cost plus tariff for new projects which will result in higher tariff and costlier power to the consumers.
The Government must ensure that no further amendments are made in Electricity Act without the completion of review of power sector reforms. It may be mentioned that Union Power Ministry has proposed a new segment named ‘supply license’ in addition to existing generation, transmission, distribution and trading licenses. The main aim of this is to further develop power market rather than improving the performance of the sector.
There is over 20000 MW of stranded generating capacity due to coal shortage. Coal India is not supplying full quantity of coal to the thermal plants which have already been completed. These plants are being asked to go for imported coal which will increase generating cost for which there may be few buyers.
With the thrust on capacity addition in private sector, several States are now in a condition of surplus power during part or most of the year. This is resulting in a situation whereby ate thermal power stations are ordered to be backed down or shut down so as to enable these private sector thermal stations to operate at optimum or full load. Gas power stations are lying idle due to costly natural gas. Priority of allocation of gas to NTPC stations and state gas power stations should be ensured at economical rates as a measure to safeguard CPSU/ State Utility finances.
There is an urgent need to place an alternate agenda for the reforms in power sector by the Government for power sector development in the country to meet the national aspiration of electricity for all at affordable cost.
Rural Electrification Policy, 2006
A village would be declared as electrified, if :
- Basic infrastructure such as Distribution Transformer and Distribution lines are provided in the inhabited locality as well as the Dalit Basti hamlet where it exists.
- Electricity is provided to public places like Schools, Panchayat Office, Health Centers, Dispensaries,Community centers etc.
- The number of households electrified should be at least 10% of the total number of households in the village.