Cabinet approves revamped distribution sector scheme; announces Rs. 3.03 lakh Cr outlay

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Cabinet approves revamped distribution sector scheme; announces Rs. 3.03 lakh Cr outlay

Union Cabinet chaired by Prime Minister Narendra Modi has approved a Reforms-based and Results-linked, Revamped Distribution Sector Scheme. The Scheme will have an outlay of Rs. 3,03,758 crore with an estimated GBS from Central Government of Rs.97,631 crore.

“The Scheme seeks to improve the operational efficiencies and financial sustainability of all DISCOMs/ Power Departments excluding Private Sector DISCOMs by providing conditional financial assistance to DISCOMs for strengthening of supply infrastructure. The assistance will be based on meeting pre-qualifying criteria as well as upon achievement of basic minimum benchmarks by the DISCOM evaluated on the basis of agreed evaluation framework tied to financial improvements. Implementation of the Scheme would be based on the action plan worked out for each state rather than a “one-size-fits-all” approach,” an official statement issued by Power Ministry said.

It is proposed that the currently ongoing approved projects under the Schemes of IPDS, DDUGJY along with PMDP-2015 for the Union Territories of Jammu & Kashmir (J&K) and Ladakh would be subsumed in this Scheme, and the savings of their GBS (approx. Rs. 17000 crore) would be part of the total outlay of the Revamped Distribution Sector Scheme under the existing terms and conditions till their sunset on 31st March, 2022. “The funds under these Schemes would be available for the identified projects under IPDS and for the approved ongoing projects under Prime Minister’s Development Program (PMDP) for the Union Territories of J&K and Ladakh under IPDS and DDUGJY till 31 March, 2023,” the statement adds.

The Revamped Distribution Sector Scheme aims to improve operational efficiencies and financial sustainability, by providing result-linked financial assistance to DISCOMs for strengthening of supply infrastructure based on meeting pre-qualifying criteria and achieving basic minimum benchmarks. The Scheme would be available till the year 2025-26. REC and PFC have been nominated as nodal agencies for facilitating implementation of the Scheme.

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