Reforms to empower consumers, provide quality power on cards

In the next wave of reforms, the government plans to ensure quality power to consumers and empower them against poor services and inefficiencies.

Through a new tariff policy, the Centre will introduce regulations that will define the consumer rights to protect them from discoms' inefficiencies.

Under these set of regulations, standard of service would be prescribed and deviations would result in penalties for discoms (power distribution companies). The distribution entities would also need to ensure adequate power, while load-shedding will be penalised.

Finance Minister Nirmala Sitharaman said the new tariff policy would also promote the industry as it would also progressively reduce cross-subsidies, making industrial power tariffs more transparent and market-driven.

Industry will also be provided time-bound grant of open access and the selection of generation and transmission project developers will also be done competitively.

The tariff policy will also bring in guidelines for elimination of regulatory assets, timely payment of Gencos.

Another major reform, proposed for the power sector, is introduction of direct benefit transfer (DBT) of the power tariff subsidy to identified consumers. A pilot project has already been tested. But all states need to be brought on board to allow consumers to buy electricity at market rates, while the government provides subsidy to certain consumers directly into their accounts.

The government will also bring a new electricity bill to incorporate various other reform initiatives for the power sector.