The Cabinet Committee on Economic Affairs (CCEA) on June 30, approved a reform-based result-linked power distribution scheme worth Rs 3.03 lakh crore that has been in the works for five years. This was pretty much on expected lines. What is your view?
Yes this particular scheme was long awaited and from a timing perspective could have come earlier but is certainly a welcome move. It is equally important for all the stakeholders across the power sector and not just the distribution segment. It is positive for stakeholders in the generation as well as the transmission space.
The other point that the government has made is that they are not shying off from taking some of these decisions which in spite of being capex incentives are actually high on impact. The crux of the scheme and the fine prints are yet to come. It is suggesting that about Rs 3 lakh crore will be invested, out of which about 97,000-98,000 crore will come from the centre.
What the minister highlighted was that it is going to be result-oriented and so quite a lot of focus was laid in terms of the discoms performing and then being eligible for these kinds of allocations. It is a big positive and this is also very refreshing. The other part is that one is actually talking of a lot of sophistication coming in the distribution sector with the advent of smart metering which will not only cut down the technical losses, but will also go a long way in terms of cutting down the commercial losses.
What about the approval of the viability gap funding with support of up to Rs 19,000 crore for BharatNet? How are you looking at the BharatNet implementation via the PPP model across the 16 states that has been approved?
One initiative which will be broad-based and have a very, very high impact is something that we are pretty much used to in the infrastructure space. I foresee grants coming through. What one needs to watch out for is how the PPP will get modified because for the longest time, we have seen a lot of success based on the PPP model which has been applied to sectors like roads and railways and water. One has to see how this actually gets implemented on the broad-based networks which have been announced.
