Budget 2020: Centre allocates Rs 22,000 Cr outlay for power, renewable energy sector

In Budget 2020-21 speech, Finance Minister Nirmala Sitharaman urged all states to convert conventional electricity metres into prepaid smart meters.

In her Budget 2020-21 speech, Finance Minister Nirmala Sitharaman announced that the government has proposed a Rs 22,000 crore outlay for renewables and power sector in 2020-21 to realise its goal of 24X7 electricity for all and providing freedom to consumers to choose service provider and tariff.

She urged all states to convert the conventional electricity meters into prepaid smart metres in next three years to provide consumers a choice of service providers and rate of electricity.

Prepaid smart metres save the cost of manual metering, billing and collection, and improve efficiency of this public service. Last month, the power ministry asked states to reduce power tariff of consumers having smart metres.

"I propose to provide Rs 22,000 crore for power and renewable for 2020-21," said Sitharaman.

She was of the view that taking electricity to all households was a major success of the government.

She was referring to the Saubhagya scheme under which 2.66 crore families were provided electricity connection. At present, except some households in difficult areas and Maoist-hit districts, power connections have been provided to all willing households.

The Minister also proposed to provide Rs 4,400 crore for a programme to ensure cleaner air in cities with population of over one million by measures such as shutting down older thermal power plants.

She told the House that the land of the shut down thermal power plants can be used for alternate purposes.

She added that the environment ministry would notify parameters for providing benefits to states opting for the scheme. All thermal power plants whose emissions are more than pre-set level can be closed down by states.

The FM also talked about the stress of distribution companies but did not specify any new or revised scheme for the revival of debt-laden power distribution utilities in the country.

Earlier this week, Power Minister R K Singh said an improved version of UDAY, meant for revival of discoms and ensuring 24X7 power, may be announced in the Union Budget for 2020-21.

"We asked for a new (UDAY) scheme. We had discussions with the finance ministry... I am optimistic that the new scheme will find a place in Budget," Singh had said.

The power minister had added, "it would be great if the scheme finds a place in Budget because it will address the requirements of the distribution companies (discoms)... for ensuring 24X7 power supply."

The Ujwal Discom Assurance Yojana (UDAY) scheme was launched in November 2015 to bring about operational and financial turnaround of debt-laden discoms.

Singh had also indicated that unlike the earlier practice of having multiple schemes, the Centre would channelise all efforts through one scheme, and states would have to reduce the losses of discoms to get all the benefits.

The Centre is contemplating to combine the features of UDAY, Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS) under an umbrella programme.

The Power Minister had also said UDAY was not a failure as losses of all discoms were reduced to around 18 percent from 22 percent in the three-year turnaround period against the targeted 15 percent in the scheme.

(Edited by Saheli Sen Gupta)