NITI Aayog -RMI Release a Report on Power Distribution Sector

WHY IN THE NEWS?

NITI Aayog has released a report on Power Distribution Sector that presents reform pathways to transform India’s power distribution sector.

About:

• The report was released providing steps to improve policymaking in the distribution sector.
• The report is titled “Turning Around the Power Distribution Sector”.
• It has been jointly authored by NITI Aayog, RMI and RMI India.

What was the need for a report?

In India, Power distribution companies (DISCOMs) incur losses every year. In the financial year 2021, total estimated losses are as high as Rs 90,000 crore. Because of these losses, DISCOMs are unable to pay power generators on time, make investments to ensure high-quality power, or prepare for use of variable renewable energy. Thus, this report becomes significant as it presents a review of reform efforts in the Indian and global power distribution sector.

About the report

Report extracts learnings and best practices from a wealth of policy experience existing in India. It examines several important reforms including the role of the private sector in distribution, regulatory oversight, power procurement, integration of renewable energy and up-gradation of infrastructure. The report is divided into chapters that focus on structural reforms, operational reforms, regulatory reforms, managerial reforms, and renewable energy integration. It presents policymakers with several reform options in order to put the distribution sector on the track of efficiency and profitability