Package for power sector, structural reforms in the offing, says Finance Minister

New Delhi, Jul 5: The government will soon unveil a package for power sector and go ahead with structural reforms to achieve the objective of 'One Nation One Grid', Finance Minister Nirmala Sitharaman said on Friday.

The minister in her maiden budget speech also assured that all willing rural households will have cooking gas and electricity connection by 2022, the 75th year of India's independence. She however kept mum on details of the package for power sector.

"Our government launched Ujwal DISCOM Assurance Yojana (UDAY) in 2015 aimed at financial and operational turnaround of DISCOMs. The government is examining the performance of the scheme and it will be further improved," the minister said.

UDAY was launched in November 2015 with an objective of turnaround of debt-laden power distribution utilities in the country. "We will work with state governments to remove barriers like cross subsidy surcharges, undesirable duties on open access sales or captive generation for industrial and other bulk power consumers. "Besides these structural reforms, considerable reforms are needed in tariff policy.

A package of power sector tariff and structural reforms would soon be announced," Sitharaman said. She further said that to take connectivity infrastructure to the next level, the government will build on the successful model of 'One Nation, One Grid'. She proposed to make available a blueprint this year for developing gas grids, water grids, information-ways, and regional airports.

Talking about the recommendations of the high level empowered committee on retirement of old and inefficient plants, and addressing low utilisation of gas plant capacity due to paucity of natural gas, she said suggestions would also be taken up for implementation now. In November last, the panel had recommended the government that the Ministry of Power and Ministry of Petroleum and Natural Gas may jointly devise a scheme in line with the earlier e-bid RLNG Scheme (supported by Power System Development Fund) to revive gas-based power plants.

The government has taken necessary action on all recommendations of the panel except regarding revival of gas based power plants. Under the earlier scheme, the government had provided subsidy to stranded gas-based plants and those running at sub-optimal level, to buy expensive imported gas. Lauding the government's two mega initiatives of Ujjwala Yojana and Saubhagya Yojana she said,"by 2022, the 75th year of India's independence, I would like to assure the nation that every single rural family, except those who are unwilling to take the connection, will have an electricity and a clean cooking facility."

Under the Ujjwala Yojana, the government has already provided over seven crore cooking gas connections to households across the country. Besides, under Saubhagya scheme, 2.63 crore families have ben provided electricity connection.

As many as 18,734 families are still to get electricity connection in Chhattisgarh while 100 per cent electrification of households is achieved in other states. Talking about clean energy, she said the government will use the LED bulb mission to promote the use of solar stoves and battery chargers in the country.

"For good quality of life and ease of living, maintaining a cleaner environment and ensuring sustainable energy use is vital...35 crore LED bulbs have been distributed under UJALA Yojana leading to cost saving of Rs 18,341 crore annually," she said.