Union Minister of State (Independent Charge) for Power & New and Renewable Energy, Raj Kumar Singh has assured that the proposed reforms in the nation’s power sector weren’t directed at undermining federalism.
Addressing a press meet through video conferencing on Thursday, the minister said, “We are not taking away any powers of states in the appointment of members and chairpersons of State Electricity Regulatory Commissions (SERCs), and the proposed reforms are aimed at promoting more transparency.”
Underlining the importance of the reforms, Singh emphasised that they were largely aimed at making the sector more consumer-centric.
While giving clarity on electricity tariffs, he stated that the powers of tariff fixation would remain with SERCs. He stressed that proposed power reforms are aimed at introducing transparency and accountability to protect the interest of consumers and ensuring the healthy growth of the power sector. He also mentioned that there were no restrictions on states for providing subsidy, but they must disburse it upfront through direct benefit transfer (DBT) framework so that the fiscal health of distribution companies was not impacted and they were able to maintain and improve distribution infrastructures like transformers and distribution lines, pay for power purchased and provide quality electricity to the people.
Other misconceptions like DBT of subsidies as being inimical to the interest of the consumers especially farmers and transferring the authority to set retail power tariff from state to Central Government were also dispelled at the meeting.
Electricity is one of the most critical pieces of infrastructure in an aspirational India and is essential for sustained economic growth. While the country has made significant improvements in the electricity generation and transmission segments, the distribution segment, having achieved 100 per cent village electrification and near-universal access to electricity, is beset with problems of operational inefficiencies, liquidity, and financial solvency.
In this regard, the Ministry of Power had prepared a draft proposal for Amendments in Electricity Act 2003 in the form of draft Electricity (Amendment) Bill 2020 with certain broad objectives. These include ensuring consumer centricity, promoting ease of doing business, enhancing the sustainability of the power sector and the promotion of green power.