Lok Sabha Question No. 1925 (UNSTARRED), answered on 2021-12-09
Subject: Revamped Distribution Scheme
Ministry: POWER
Asked by: Jayant Sinha

## GOVERNMENT OF INDIA MINISTRY OF POWER LOK SABHA

## UNSTARRED QUESTION NO.1925 ANSWERED ON 09.12.2021

## REVAMPED DISTRIBUTION SCHEME

1925.  SHRI JAYANT SINHA:

Will the Minister of POWER be pleased to state:

- (a) the salient features of the Revamped Distribution Scheme;
- (b) the  targets  set  for  the  DISCOMs  under  the  said  scheme  for  their  functional improvement;
- (c) the pre-qualifying criteria and the basic minimum benchmarks set for DISCOMs to be eligible for financial assistance; and
- (d) the DISCOMs with which MOUs have been signed so far?

## A N S W E R

THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY

(SHRI R.K. SINGH)

(a) : Government of India have launched the Reforms-based and Results-linked, Revamped Distribution Sector Scheme with the objective of improving the quality and reliability of power  supply  to  consumers  through  a  financially sustainable  and operationally efficient  Distribution  Sector.  The  salient  features  of  the  Scheme  are  as under:

- (i) The scheme has an outlay of Rs.3,03,758 crore and an estimated GBS from Central Government of Rs.97,631 crore.
- (ii) The scheme aims to reduce the AT&C losses at pan-India levels to 12-15% and ACS-ARR gap to zero by 2024-25.
- (iii) The scheme has a duration of 5 years (FY 2021-22 to FY 2025-26). The sunset date of scheme will be 31.03.2026.
- (iv) The  scheme  has  two  major  components:  Part  'A'  -  Financial  support  for Prepaid Smart Metering & System Metering and upgradation of the Distribution  Infrastructure  and  Part  'B'  -  Training  &  Capacity  Building  and other Enabling & Supporting Activities.
- (v) State Governments/ Distribution Companies (DISCOMs) are free to undertake customized  reform  measures  and  works  to  meet  the  specific  needs  of  the State.

- (vi) The  release  of  funds  under  the  scheme  has  been  linked  to  Results  and Reforms. The pre-qualifying criteria need to be mandatorily met with by the DISCOMs  before  they  can  be  evaluated  for  release  of  funds  under  the scheme.
- (vii) REC  and  PFC  are  the  nodal  agencies,  responsible  for  implementing  the scheme across the country.

(b) : The scheme aims to reduce the AT&C losses at pan-India levels to 12-15% and  ACS-ARR  gap  to  zero  by  2024-25.  Recognizing  that  various  DISCOMs  are  at different performance levels - both operational and financial, instead of adopting a one size fits all approach, the scheme envisages customized action plans as per the needs of the individual DISCOMs.

(c) : The  scheme  envisages  a  Results  Evaluation  Framework  incorporating performance against result parameters and trajectories for improvement. The Results Evaluation  Framework  has  two  components  (i)  Pre-qualifying  criteria;  and  (ii)  Result Evaluation Matrix, details of which are given as Annexures-I & II respectively.

Utilities clearing the pre-qualifying criteria would be eligible for evaluation against the result evaluation matrix, which would determine their eligibility for release of  funds for a particular year. The result evaluation framework would be different for each  DISCOM  and  would  be  fixed  for  each  year  depending  on  the  cumulative performance as well as the annual performance.

There would be result parameters in the Result Evaluation Matrix, which will  be  assigned  maximum marks on the basis of significance towards achieving the objectives of the Scheme. The maximum marks and targets for individual parameters may  differ  for  each  of  the  evaluation  years.  The  funds  for  a  particular  year  will  be released only if the Utility clears the Pre-qualifying criteria (Annexure-I) and the total weighted score is more than 60 marks on the Result Evaluation Matrix (Annexure-II).

(d) : The last date for receipt of Action Plans and DPRs is 31.12.2021.

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## ANNEXURE-I

## ANNEXURE REFERRED TO IN REPLY TO PART (c) OF UNSTARRED QUESTION NO. 1925 ANSWERED IN THE LOK SABHA ON 09.12.2021

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Pre-qualifying Criteria to be mandatorily met by DISCOM for Further Evaluation under Revamped Distribution Sector Scheme.

- (i) DISCOMs would publish quarterly un-audited accounts within 60 days of  the  end  of  each quarter  during first two  years  of  operation  of  the scheme (i.e.  for  FY  2021-22  and  FY  2022-23)  and  thereafter  audited quarterly accounts within 45 days from 3rd year onwards.
- (ii) Further,  DISCOMs  would  publish  audited  annual  accounts  by  end  of December of the following year during first two years of operation of the scheme (i.e. for FY 2021-22 and FY 2022-23) and thereafter audited annual accounts by end of September of the following year from 3rd year onwards.
- (iii) DISCOMs will have ensured that no new Regulatory Assets have been created in latest tariff determination cycle.
- (iv) State Government to ensure 100% payment of subsidy for the previous year and advance payment of subsidy up to current period in line with section 65 of EA2003 and wipe out the remaining subsidy amount by the end of the project period.
- (v) All Government Departments/ Attached Offices/ Local Bodies/ Autonomous Bodies/   Boards/Corporations have made 100% payment of current electricity dues for the year under evaluation.
- (vi) Progress  commensurate  to  commitment  in  putting  Govt.  Offices  on prepaid meters.
- (vii) No. of days Payables to Creditors including Gencos for the year under evaluation  is  equal  to  or  less  than  the  projected  trajectory  as  per results evaluation framework.
- (viii) Tariff order for the current year in which evaluation is being done and true up of penultimate year has been issued and implemented w.e.f. 1st April of current FY.

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ANNEXURE-II ANNEXURE REFERRED TO IN REPLY TO PART (c) OF UNSTARRED QUESTION

NO. 1925 ANSWERED IN THE LOK SABHA ON 09.12.2021 ************** Summary of Results Evaluation Matrix for evaluation of DISCOM performance under Revamped Distribution Sector Scheme

| Sr. No.   | Category                                                            |   Weightage for Evaluation |
|-----------|---------------------------------------------------------------------|----------------------------|
| 1.        | Financial Sustainability                                            |                         60 |
| 2.        | Outcome of infrastructure Works                                     |                         20 |
| 3.        | Infrastructure Works                                                |                         10 |
| 4.        | Policy & Structural Reforms, Capacity Building and IT/OT Enablement |                         10 |
|           | Total                                                               |                        100 |

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