NEW DELHI: The draft Electricity (Amendment) Bill released by the Centre is facing stiff opposition from stakeholders, with critics stating that making the proposed system viable will be a difficult task.
The bill proposes a direct benefit transfer (DBT) system for electricity subsidies, akin to that used for LPG. Currently, state governments transfer subsidies directly to power distributors (discoms) who collect subsidised fees from consumers.
But if the draft bill is made into law, state governments will have to pay subsidies directly into the consumer’s account, who will then have to pay the full amount to the discom. According to industry sources, many states and discoms are opposed to the move, though by no means not all. Andhra Pradesh has announced a DBT system for farmers with a plan that includes setting up smart meters.
Proponents also say that discoms’ financial health will be improved—saved from the vagaries of state government payouts. But critics note that securing full and regular payment from customers will be a difficult task, as will ensuring that DBT payments are made by governments on time.
In a recent virtual conference organised by Care Ratings, BSES Rajdhani Power CEO Amal Sinha said that the scheme was well intentioned but will face “operational challenges”. “Since it also involves shelling out a lot of finances, it is practically not possible,” Gujarat Urja Vikas Nigam CFO Shubhadeep Sen added.