The upcoming Union Budget might feature a new scheme aimed at the power distribution sector, according to R.K. Singh, Minister of State (Independent Charge) for Power and Renewable Energy quoted widely in the media.
The new set of proposals aimed to take forward the exercise of debt and loss reduction of state government-owned power distribution utilities.
Singh said that the power ministry was addressing the requirements of power discoms to ensure 24×7 electricity supply. The power ministry will now have single scheme that would include elements of all earlier schemes, especially UDAY that was introduced in November 2015.
The power minister also suggested that financing by PFC and REC to power distribution companies will be governed by a good credit risk. Discoms will need to work out a trajectory for loss reduction in order to earn a good credit score, it is reported.
The new scheme would combine UDAY with development funds for strengthening the power distribution system. Once combined, the infusion of funds would be linked to the achievement of milestones under UDAY 2.0.
