Sidhartha Shuklamoneycontrol.com
Having 24X7 supply of electricity is a dream for many Indians -- something that the Narendra Modi government has promised to make a reality for every household by 2019.
Two years into its tenure, the BJP-led government has rolled out a number of ambitious and innovative initiatives to boost the country's power sector.
As the government took office, Power Minister Piyush Goyal faced challenges on each front: generation, distribution and consumption.
In the wake of the coal scam and production struggles at Coal India, power plants struggled for fuel; lack of investments meant transmission and distribution (T&D) losses remained high while indebted distribution companies meant demand for power remained low.
Over the last two years, the government launched the following schemes and initiatives:
- Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY): This scheme was launched under the rural electrification programme and subsumed the earlier Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). It aims to provide adequate and quality power supply in rural areas.
Under this, the government has proceeded to electrify about 11,000 unelectrified villages out of the total 18,500 in India.
In a boost for transparency, the Power Ministry launched an app called GARV, which allows anyone to monitor the progress of this rural electrification project.
- Ujwal Discom Assurance Yojna (UDAY): In order to ease the burden of debt (Rs 4.3 trillion as of September 2015) on state electricity boards (SEBs), the government launched the UDAY scheme under which part of their debt would be converted into bonds and transferred to their respective states' books.
In lieu, discoms will have to pledge to reform and rationalize power tariffs.
As of March 2016, 10 states had signed memorandum of understanding (MoUs) to restructure Rs 1.96 trillion of debt under the UDAY plan.
The ten states that have signed MoUs under the UDAY programme (Source-Standard Chartered Report):
However, the sector continues to remain beset with challenges. Demand from struggling SEBs continues to remain low despite increased coal production and a government scheme to provide cheaper imported gas to stranded power plants.
Over the last five years, the following new capacities have been added (in MW): (source: MOP_Annual_Report_2015-16)
Sector-wise and fuel-wise summary of the capacity addition for the year 2014-15 is given below in the following table: (source: MOP_Annual_Report_2015-16)
Sector-wise and fuel-wise summary of the capacity addition for the year 2015-16 (achieved capacity as of November 30, 2015) is given below in the following table: (source: MOP_Annual_Report_2015-16)
Hits
- Kickstarting the power generation sector, which had come to a virtual halt in the aftermath of the Coalgate verdict.
- Taking steps to boost electricity generation as well as transmission. Easing SEB debt burden through innovative initiatives such as UDAY.
Misses
- Ambitious target of round-the-clock, high-quality power to every household by 2019 may be difficult to achieve despite positive steps taken.
