NEW DELHI: The ministry of power has sought an extension of the deadline for the Revamped Distribution Sector Scheme (RDSS) by two years through FY28 in order to complete the envisaged targets, according to a report by the Lok Sabha’s Standing Committee.
The scheme aims to improve the operational efficiencies and ensure financial sustainability of the distribution sector.
The government had launched RDSS with an outlay of Rs 3 lakh crore for the duration of five years (FY22 to FY26) with an aim to reduce the Aggregate Technical & Commercial (AT&C) losses to pan-India levels to 12-15%. It has two components : providing financial support for prepaid smart metering & system metering and upgradation of the distribution infrastructure and the other being training and capacity building.
“I would like to request you regarding RDSS that we will need an extension of the deadline by two years. As per our current implementation status, a lot of work remains to be done, especially in the case of smart meters. This will approximately take two years,” Pankaj Agarwal, secretary, ministry of power told the committee.
As of February 10, the government has installed 20.8 million smart meters against its target of 50 million for the fiscal year 2024-25. An extension of the scheme would require more funds from lenders like REC.
The ministry also informed that due to delay in award of projects in the initial years of the scheme, the budget utilization for the scheme was slow. “Now, the physical progress under the scheme has gained pace which would result in effective utilization,” the ministry said, adding that continuous review meetings are being undertaken at the nodal agency and ministry level for monitoring the progress of works to ensure effective utilization of funds.
“It was submitted before the Committee during the evidence that the deadline for implementation of the Revamped Distribution Sector Scheme will be extended by two years,” the committee said in its report.
As of February 10, the power utilities have so far utilized 96% of the funds released during FY 2024-25. The government has allocated Rs 12,665 crore for the scheme, as per the revised estimates for 2024-25.
When asked about the constraints being faced in speedy installation of smart meters, the power ministry said that the installation has been affected due to the delays in issue of tenders and establishment of a direct debit facility. There have also been delays in testing and approvals like field installation and integration test, factory acceptance test and likewise, the ministry said.
At present, approximately 80,000 smart meters are being installed per day under the scheme. In the next 20 days or a month’s time, the government expects this number to reach 100,000 per day.
Additionally, all India AT&C losses of discoms stood at 16.87% in 2023-24. The Committee noted that the accumulated losses of discoms have been continuously increasing from Rs. 5.45 lakh crores in financial year 2020-21 to Rs. 5.84 lakh crore in 2021-22, Rs. 6.47 lakh crore in 2022-23 to now Rs. 6.92 lakh crore in 2023-24.
“Further, the billing and collection efficiencies of the discoms are not very impressive and the gap between Average Cost of Supply and Average Revenue Realized has been fluctuating and is far from zero,” the committee said.
Source: The Financial Express
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