Budget 2021 : Discoms – UPSC GS3

  • The budget proposes a Rs. 3.05 lakh-crore scheme, spread over five years, to revive discoms.
  • The DISCOMS have been making huge losses and have been cash-strapped. Total outstanding dues of the discoms towards power-generating firms stood at over ₹35 lakh crore as of December.
  • The budget also proposes a framework to provide electricity consumers with an option to choose from service providers.
  • Budget proposal to introduce a National Hydrogen Energy Mission in the next financial year for generating hydrogen from green sources.
  • Significance:
    • The scheme will provide assistance to discoms from infrastructure creation to financial improvements. This will help reform and revamp the power distribution sector scheme.
    • The announcements are aimed at ensuring 24-hour power for all as envisaged by the Central government.
    • The proposed framework to give consumers alternatives to choose from among more than one Distribution Company will help break the monopolies of distribution companies and will promote competition and efficiency among them. This is in line with the recently enforced consumer rules for the power sector to ensure delivery of services.
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