India plans legal route for power sector reforms

New Delhi: After launching the Pradhan Mantri Sahaj Bijli Har Ghar Yojana for universalizing electricity access, the National Democratic Alliance (NDA) government is readying a raft of power sector structural reforms including legal provisions to drive electricity demand, promoting retail competition and tariff slab rationalization to drive manufacturing.

Speaking at the launch of the scheme on Monday evening, India’s newly appointed power and new and renewable energy minister Raj Kumar Singh said that going forward his ministry is readying a scheme to provide 24X7 reliable electricity.

Singh said the scheme that will ensure fines for a distribution firm for not supplying electricity will be taken to the prime minister for his approval.

Not only will this bring the NDA closer to delivering on its promise to improve energy access, it will also generate fresh demand for electricity in the country—the lack of which is weighing down the entire power sector. Around 304 million Indians live without access to electricity.

Singh’s Monday statement is part of the government’s larger agenda to reform India’s power sector and revive economic growth which has decelerated to a three-year low of 5.7% in the June quarter of 2017-18.

This comes at a time when states are reneging on their off-take commitments for projects. Also, with states unwilling to buy electricity, no new power purchase agreements (PPAs) are being inked, contributing to the uncertain outlook for the Indian power sector.

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