Sinha stresses on power reforms

Special emphasis on distribution reforms and elimination of theft of electricity

Union Finance Minister Yashwant Sinha, in his Union Budget for 2002-03 presented to Parliament on Thursday, said that while broadly agreeing with the desirability of power sector reforms to achieve commercial viability of State Electricity Boards, special emphasis has been laid on the distribution reforms and elimination of theft of electricity.

Subsequently, the high level empowered group of chief ministers and union ministers has agreed to a one time settlement scheme in regard to SEB overdues to the central public sector utilities through securitisation and issue of tax free bonds by the respective state hovernments, subject to the achievement of specified performance milestones and full payment of current dues in the future.

Sinha has urged upon the states to come forward and implement the scheme speedily.

The Ministry of Power has already signed Memoranda of Understanding with 20 States and is expected to complete the exercise with the remaining states soon. To redouble our effort in this direction APDP is being redesigned as the Accelerated Power Development and Reform Programme , with an enhanced plan allocation of Rs 35 billion for 2002-03, up from Rs 15 billion this year.

Access of the states to the fund will be on the basis of agreed reform programmes, the centre piece of which would be the narrowing and ultimate elimination of the gap between unit cost of supply and revenue realisation within a specified time frame. Accordingly, the focus of reform has shifted from generation to transmission and distribution.

A high level monitoring group will oversee the progress of this programme. Allocation for this programme will be augmented by loans on concessional terms from the Power Finance Corporation .

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