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Last Updated : Feb 01, 2020 07:23 PM IST | Source: Moneycontrol.com

Budget 2020: FM proposes smart metering to help discoms

She urged all the states and union territories to replace conventional energy meters by prepaid smart meters in the next 3 years.

Representative image
Representative image

In a major relief to electricity discoms, Finance Minister Nirmala Sitharaman said the government would promote “smart” metering and extension of corporate tax cut to electricity generation companies.

She urged all the states and union territories to replace conventional energy meters by prepaid smart meters in the next three years. This would give consumers the freedom to choose the supplier and rate as per their requirements.

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To accelerate the smart metering, a scheme with GoI funding for supply and installation of smart meter on PAN india basis. The government plans to convert all electricity meters into smart prepaid meters by 2022.

In order to attract investment in power sector, Sitharaman proposed to extend the concessional corporate tax rate of 15 percent to new domestic companies engaged in the generation of electricity. The concessional rate can be availed by  newly incorporated domestic companies in the manufacturing sector which start manufacturing by March 31, 2023.

Addressing the issue of financial stress in the power sector, Sitharaman assured further reforms would be taken for discoms. "Taking electricity to every household has been a major achievement. However, the distribution sector, particularly the discoms are under financial stress," said Sitharaman.

Government data shows the average commercial losses of discoms at 21.35 percent and the revenue gap at 38 paise per unit of power. Discoms’ dues to power producers, estimated at Rs 82,000 crore, is considered a key factor behind stress in the power sector.


The current Ujjwal Discom Assurance Yojana (UDAY) expires in March 2020. While UDAY scheme reduced discom losses in the first few years since the program was rolled out in November 2015, the losses returned to almost double the losses of the previous year in 2018-19.




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First Published on Feb 1, 2020 07:23 pm
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