Its a reform packed Budget for the power sector. The finance minister,Yashwant Sinha has announced a series of incentives for reforming states inthe form of increased fund allocations and additional financial support fromvarious schemes.Rural electrification has also been given top most priority in the Budgetproposals for 2001-02 and a package of incentives has been announced forimproving the power distribution system in rural areas.
Restoration of the financial health of SEBs was listed as the `most vitalelement of the reform process' by the finance minister in his budgetspeech.
Increased fund allocation to reforming states has been made under theAccelerated Power Development Programme (APDP) scheme of the power ministryand the corpus of this fund has been increased to Rs 1,500 crore next yearfrom Rs 1,000 crore this year.
Moreover, the reforming states will also receive support from the Centre inthe form of preferential allocation of power to SEBs from the central powersector undertakings (CPSUs) besides preferential allocation of external aid.
Additional investments by the CPSUs in generation and transmission will alsobe made in these states.
In addition to this, assistance from the Fiscal Reform Incentive Fund,recommended by the 11the Finance Commission, would also be linked to theachievement of power reforms by states.
On rural electrification, Mr Sinha has announced a package of incentives forimproving the power distribution system in rural areas. Expressing concernover the slow pace in electrifying villages, Mr Sinha announced a series ofincentives which includes completion of electrification of villages in thenext six years, extension of assistance to states for villageelectrification works under the Prime Minister Gramodaya Yojana, stepping upcredit support from REC to the SEBs for speedy electrification of dalitbasis and households of scheduled tribes.
Besides this, Mr Sinha has also earmarked a sum of Rs 750 crore out of theRural Infrastructure Development Fund (RIDF) for rural electrificationworks, and has allowed REC to float capital gains tax exemption bonds alongwith Nabard and NHAI under Section 54 EC of the I-T Act.
The Plan outlay for central power utilities has also been raised to Rs10,030 crore for 2001-02 from Rs 9,194 crore this year.
The total cost to SEBs of implicit subsidies amounted to about Rs 36,000crore this year. After accounting for cross subsidy, actual commerciallosses of all SEBs combined are estimated to be about Rs 24,000 crore.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
