Almost three-quarters of India’s distribution companies have submitted draft proposals for the new ‘reforms based and results linked’ scheme.

India’s Ministry of Power has reported that 39 out of the 55 beneficiary state owned distribution companies have now submitted their proposals for distribution sector reform and the remainder are expected to send them shortly.

Among these, the state governments of Assam and Meghalaya are reported to have become the frontrunners, with measures aimed towards loss reduction, the implementation of smart prepaid metering for the majority of their customers and 100% feeder level energy accounting by financial year 2023.

Other proposed measures include the reconductoring of old and/or frayed conductors, conversion to aerial bundled cables, segregation of agriculture feeders and upgrading of billing and other IT/OT systems.

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“This time, two of the north-eastern states have shown exemplary initiative in plan formulation for the turning around of their power sector,” the Ministry said in a statement.

The Reforms-based and Results-linked, Revamped Distribution Sector Scheme was launched by the Ministry of Power in July to address the longstanding problem of high energy losses, alongside the drive for a nationwide rollout of smart metering.

Under the scheme the distribution companies are required to develop and submit proposals and action plans for modernising and strengthening their distribution infrastructure and improving the reliability and quality of supply to end consumers, and for achieving financial sustainability.

The cost is estimated at Rs3.04 trillion (US$40.7 billion), of which Rs976.3 billion (US$13.1 billion) will receive budgetary support from central government through 2025/2026.

This assistance to the distribution companies is reforms linked and will be based on meeting pre-qualifying criteria as well as on the achievement of performance benchmarks tied to financial and operational improvements.

A unique feature of the scheme is that its implementation is based on the plans that each state works out to address state specific issues, rather than on a ‘one-size-fits-all’ approach.

Key interventions that will be prioritised for support include ensuring 100% system metering, the implementation of prepaid smart metering and the implementation of infrastructure works for loss reduction.

Another is the segregation of feeders for the supply of power for agricultural purposes, where solarisation is proposed to take place under a government scheme to deploy solar powered pumps and small scale solar PV installations into the sector.

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