Reform-based scheme: Discoms get till Dec 31

Source: Indian Express

What is the News?

Union Minister of Power has said that the Power distribution companies (discoms) looking to avail funds under the government’s Rs 3.03-lakh crore Reform Based Scheme for discoms will have to submit plans to cut losses by 31st December,2021.

About Reform Based Power Distribution Scheme:
  • The Scheme aims to improve the operational efficiencies and financial sustainability of DISCOMs/ Power Departments excluding Private Sector DISCOMs by providing conditional financial assistance for strengthening of supply infrastructure.
Objectives of the Scheme:
  • Reduction of AT&C losses to pan-India levels of 12-15% by 2024-25.
  • Reduction of ACS-ARR gap to zero by 2024-25.
  • Developing Institutional Capabilities for Modern DISCOMs
  • Improvement in the quality, reliability, and affordability of power supply to consumers through a financially sustainable and operationally efficient Distribution Sector.


  • Power Finance Corporation(PFC) and Rural Electrification Corporation(REC) have been nominated as the nodal agencies for the implementation of the scheme.
Duration of the Scheme:
  • The Scheme would be available till the year 2025-26.
Key Features of the Scheme:
  • Financial Assistance: The financial assistance under the Scheme will be based on meeting pre-qualifying criteria as well as upon achievement of basic minimum benchmarks by the DISCOMs.
  • Approach: Implementation of the Scheme would be based on the action plan worked out for each state rather than a “one-size-fits-all” approach.
  • Merging of Projects: The ongoing works under the Integrated Power Development Scheme(IPDS), Deen Dayal Upadhyaya Gram Jyoti Yojana and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) will be merged under this scheme.
  • Solarisation of agricultural Feeders: The Scheme has a major focus on improving electricity supply for the farmers and for providing daytime electricity to them through solarization of agricultural feeders.
  • Smart Metering: The scheme enables consumer empowerment by way of prepaid Smart metering to be implemented in Public-Private-Partnership(PPP) mode.
  • Use of Technology: Artificial Intelligence would be used to analyze data generated to enable DISCOMs to make informed decisions.
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