Reforms-Based And Results Linked, Revamped Distribution Sector Scheme

The Reforms-based and Results linked, Revamped Distribution Sector Scheme was launched in the year 2021 by the Ministry of Power, with the aim of improving the quality, reliability and affordability of power supply to consumers in India. The scheme focuses on reducing the AT&C (Aggregate Technical and Commercial) losses to pan-India levels of 12-15% and the ACS-ARR (Average Cost of Supply-Average Revenue Realized) gap to zero by 2024-25.

Overview

The scheme aims to develop institutional capabilities for modern DISCOMS, improve the quality, reliability and affordability of power supply to consumers and reduce the AT&C losses and the ACS-ARR gap. The scheme has two parts: Metering & Distribution Infrastructure Works, Training & Capacity Building and other Enabling & Supporting Activities. The financial outlay for the scheme is Rs 3,03,758 crore, with an estimated Gross Budgetary Support from the Central Government of Rs. 97,631 crore. The scheme is available till the year 2025-26 and is open to both Central and State Governments. The release of funds under the scheme has been linked to results and reforms and pre-qualifying criteria need to be mandatorily met by the DISCOMS before they can be evaluated for the release of funds under the scheme.

• Scheme Name : Reforms-based and Results linked, Revamped Distribution Sector Scheme
• Scheme Modified: Launched in 2021
• Scheme Fund Allocated: Rs 3,03,758 crore with an estimated Gross Budgetary Support from the Central Government of Rs. 97,631 crore
• Type of Government Scheme: Central Government of India
• Sponsored / Sector Scheme: Sector Scheme
• Website to apply: https://powermin.gov.in/
• Helpline No.: 1800-180-4343

Features

The objective of the scheme is to reduce the AT&C (Aggregate Technical and Commercial) losses to pan-India levels of 12-15% and the ACS-ARR (Average Cost of Supply-Average Revenue Realized) gap to zero by 2024-25. The assistance will be based on meeting pre-qualifying criteria and achievement benchmarks of basic minimum. It aims to develop institutional capabilities for modern DISCOMS and improve the quality, reliability and affordability of power supply to consumers.

The scheme has two parts, Metering & Distribution Infrastructure Works and Training & Capacity Building and other Enabling & Supporting Activities. The scheme covers approximately 25 crore consumers with prepaid smart metering. The key features of the scheme are that it is available until 2025-26 and leverage of artificial intelligence to analyze data generated through information technology, operational technology devices, including system meters and prepaid smart meters. Existing power sector reform schemes will be merged into the umbrella program, and the release of funds has been linked to results and reforms.

Latest news about the scheme

The Indian government has decided to privatize power departments and utilities in Union Territories under the Atma Nirbhar Bharat Abhiyaan to reform the power sector. Privatization will bring in private capital, new technologies, innovations, and competition to improve operational and financial efficiencies, leading to better services for consumers. The revamped Distribution Sector Scheme is linked to results and focuses on improving operational and financial efficiencies, leading to a decline in AT&C losses and ACS-ARR Gap, indicating a positive impact on the sector.

Benefits

There are the benefits of the Reforms-based and Results linked, Revamped Distribution Sector Scheme:

• Improved operational and financial efficiencies of power utilities.
• Reduction in Aggregate Technical and Commercial (AT&C) losses.
• Reduction in the gap between Average Cost of Supply (ACS) and Average Revenue Realized (ARR) for distribution companies.
• Better financial management for power utilities.
• Sustainability of the power sector.
• More accurate subsidies for distribution companies.
• Better quality of electricity supply.
• Increased competition in the power sector.
• Implementation of new technologies and innovations.
• Increased efficiency in power generation and distribution.
• Better services for consumers.
• Increased accountability for power utilities.

Drawback

The scheme covers agricultural connections only through Feeder Meters. Therefore, if a farmer does not have access to Feeder Meters, the scheme may not be useful for them.

How to Apply?

Here are the steps to apply for the Reforms-based and Results linked, Revamped Distribution Sector Scheme:

Step 1: Visit the official website of the Ministry of Power, Government of India.

Step 2: Look for the “Schemes” section on the website and click on the “Distribution Sector Scheme” link.

Step 3: Read the guidelines and eligibility criteria carefully.

Step 4: Download the application form and fill in the required details.

Step 5: Attach the necessary documents, including proof of identity, proof of address and proof of ownership of the power utility.

Step 6: Submit the completed application form along with the supporting documents to the designated address mentioned in the guidelines.

Step 7: Wait for the authorities to process the application.

Step 8: Once your application is approved, you will receive a notification from the authorities.

Step 9: Follow the instructions given in the notification to avail the benefits of the scheme.

It is important to note that the application process and eligibility criteria may vary depending on the state or union territory in which the power utility is located. Therefore, it is advisable to check the guidelines and eligibility criteria specific to your state or union territory before applying for the scheme.

Documents Required

The following is a list of documents required for the application of this scheme:

1. Audited financial statements of the power utility for the last three years
2. A detailed project report (DPR) for the proposed reforms and measures to be implemented under the scheme
3. A plan for reduction of Aggregate Technical and Commercial (AT&C) losses
4. A plan for reducing the gap between Average Cost of Supply (ACS) and Average Revenue Realized (ARR)
5. Details of existing power purchase agreements (PPAs) and proposed PPAs
6. A plan for improving customer services and grievance redressal mechanisms
7. A plan for the adoption of new technologies and innovations to improve efficiency
8. Details of the existing transmission and distribution infrastructure and proposed infrastructure improvements
9. A plan for metering and billing improvements
10. Details of any ongoing legal disputes or regulatory proceedings involving the power utility.

Conclusion

The Reforms-based and Results linked, Revamped Distribution Sector Scheme aims to reduce AT&C losses to pan-India levels and the ACS-ARR gap to zero by 2024-25. It covers approximately 25 crore consumers with prepaid smart metering, aims to improve the quality, reliability and affordability of power supply to consumers and prioritizes the urban areas, UTS, AMRUT cities and High Loss areas. The scheme aims to enhance the operational efficiencies and financial sustainability of all DISCOMS (excluding private sectors)/ Power Departments by providing conditional financial assistance to DISCOMs.