India’s socio-economic growth is closely linked to the growth of its power sector. After the BJP-led National Democratic Alliance (NDA) storms back to power for the consecutive second term, the government’s big job now is to recharge a struggling power sector.
Increasing losses and piling debt of state-owned power distribution companies (DISCOMs) remains a worry for the power sector. The previous NDA regime had introduced the Ujwal DISCOM Assurance Yojana (UDAY) in November 2015 for the operational and financial turnaround of DISCOMs. The scheme aims to reduce interest burden, cost of power and power losses in distribution sector, besides improving operational efficiency of DISCOMs by reducing the country’s aggregate technical and commercial (AT&C) losses from around 22 per cent to 15 per cent by 2018-19.
UDAY has received a very lukewarm response from DISCOMs and so far, only 15 states have been able to bring AT&C losses below 15 per cent. Also, according to a CRISIL report, aggregate external debt of DISCOMs is expected to increase to pre-UDAY levels of Rs 2.6 lakh crore by the end of the current fiscal, which is alarming. So, the new government has to revive the second leg of power sector reforms under the planned UDAY 2.0.
The Modi 1.0 had envisaged 24×7 Power for All from April 1, 2019 and a giant stride was taken in that direction. According to the government data, out of the 26.30 million households targeted under the scheme, 26.28 million, or 99.93 per cent households have already got electricity connections under the flagship Pradhan Mantri Sahaj Bijli Har Ghar Yojana or Saubhagya. Now, for Modi 2.0, the challenge will be to make reliable power available 24X7 at affordable cost. Expressing his government’s commitment, the Power Minister RK Singh said, “As we begin our second innings, our focus will be on 24×7 Power For All. We want to provide reliable and sustainable Power For All.”
