- Monday, February 24, 2025
By: Shubham Ghosh
RAJIV Kumar, the chairman of India’s government public policy think tank Niti Aayog said recently that a healthy and efficient distribution sector is key for improving the ease of doing business.
Releasing a report titled ‘Turning Around the Power Distribution Sector’, Kumar said on Tuesday (3) that the report examines many important reforms such as the role of the private sector in distribution, power procurement, regulatory oversight, upgrading of infrastructure, integration of renewable energy, etc.
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“A healthy and efficient distribution sector is essential, whether for improving the ease of doing business, or for improving the ease of life,” an official statement said, quoting Kumar.
The report is co-authored by Niti Aayog, RMI and RMI India, an independent non-profit organization that aims to facilitate India’s transition to a clean, prosperous and inclusive energy future.
In a statement, Niti Aayog member VK Saraswat said that the report presented the policymakers with a menu of reform options to put the distributions sector on the track of efficiency and profitability.
The statement said most power-distribution companies (discoms) in India suffer losses every year and in the FY2021, the total losses are estimated to be as high as Rs 90,000 crore. It added that because of these accumulated losses, the discoms fail to pay generators on time, making investments required to ensure high-quality power or prepare for greater use of variable renewable energy.
Highlighting the need for addressing the current challenges, Clay Stranger, managing director, RMI said, “A robust and long-lasting solution to the woes of the discoms requires changes in policy as well as organisational, managerial, and technological reforms. Different states have travelled along different pathways of reforms, giving a rich set of policy experiments to learn from.”
