The plan for discoms will continue to be supportive for power producers

Mumbai, Ta. 02 February 2021, Tuesday

The proposal presented in the budget as part of the budget to improve the performance and financial position of state power distribution companies (DISCOMs) will be a long-term support for power generating companies. Discoms are a weak bud in the power supply chain. The budget proposal will help increase the cash flow of power generating companies, according to a report by ratings agency Fitch.

The proposed પાંચ 21 billion five-year plan aims to reduce power losses, improve revenue, increase power quality and create competition in the power sector.

Discoms are facing huge debts as a result of costly power, technical and commercial losses. Earlier, the government had launched Ujwal Discom Assurance Scheme (Uday) in 2012. However the scheme was not successful in improving the condition of the discoms.

The pandemic has increased the difficulty of discoms. The decline in demand for electricity from commercial customers with higher rates has affected the revenue of discoms. Cash recovery also declined.

The budget proposal states that there is a plan to spend on smart metering, structural improvements, etc. to improve the condition of discoms.

A meaningful change in the financial position of the discoms will not only increase the capacity utility of the power generating companies but also help them to get the money on time.