Driving Improvements: Government schemes aim to better sector performance

Government schemes aim to better sector performance

In the past year, the power sector has witnessed significant achievements, the most notable being the near 100 per cent household electrification under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya). The performance of discoms also improved owing to structural reforms introduced under the Ujwal Discom Assurance Yojana (UDAY) though many targets are yet to be met. Further, there is an overall improvement in power supply with the strengthening of distribution infrastructure under schemes such as Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and the Integrated Power Distribution Scheme (IPDS). Other initiatives such as the National Smart Grid Mission (NSGM) and Unnat Jyoti by Affordable LEDs for All (UJALA) have also made an impact on the sector over the years.

Indian Infrastructure takes a look at the progress of key government schemes in the power sector during the past year…


Saubhagya was launched in September 2017 with the aim of providing electricity to every willing household in both rural and urban areas by March 2019. The scheme aimed at providing last-mile connectivity to individual households, as against village electrification targeted under older electrification schemes. As of October 10, 2017, when Saubhagya implementation was kick-started, states had reported that about 40 million households were unelectrified, based on census figures. However, surveys by the electrification teams found that the houses left for electrification were fewer in number. As per the latest available figures on the Saubhagya web portal, of the 26.8 million household electrification target, 26.28 million now stand electrified. Overall, 29 out of 30 states have achieved 100 per cent electrification. Chhattisgarh is the only state that is yet to achieve 100 per cent electrification (its electrification progress currently stands at 99.67 per cent with only 18,734 households left unelectrified).


Under UDAY, 27 states and five union territories (UTs) have signed MoUs with the central government for financial and operational improvements. Under the scheme, the states took over 75 per cent of the debt of their distribution utilities by way of bonds to help ease their debt burden. As of April 26, 2019, UDAY bonds totalling Rs 2.32 trillion have been issued. This is around 86 per cent of the total bonds worth Rs 2.69 trillion envisaged to be issued under the scheme.

The book losses of UDAY discoms reduced from Rs 378.77 billion in 2016-17 to Rs 150.49 billion in 2017-18. However, reportedly the losses increased to Rs 240 billion during the period April-December 2018 owing to an increase in power costs.

Since the launch of UDAY, aggregate technical and commercial (AT&C) losses have been consistently declining and reduced from 20.74 per cent in 2015-16 to 18.72 per cent in 2017-18. However, as of April 2019, the AT&C losses of discoms stood at 19.95 per cent, higher than the 15 per cent target envisaged by the end of 2018-19. Meanwhile, the gap between the average cost of supply and the average revenue realised (ACS-ARR) came down from Re 0.59 per kWh in 2015-16 to Rs 0.17 per kWh in 2017-18, which as per latest available figures now stands at Re 0.32 per kWh in April 2019.

Meanwhile, with respect to progress on metering targets, 100 per cent feeder metering has been achieved in rural and urban areas while 59 per cent and 80 per cent distribution transformer metering has been achieved in rural and urban areas respectively. For smart metering, progress has been tardy, with 4 per cent smart metering achieved above the 500 kWh per month consumption level, while for the 200 kWh-500 kWh level it is only 2 per cent.


Launched in 2014, the IPDS aims to provide quality and reliable 24×7 power supply in urban areas. As of April 26, 2019, a total of Rs 320.58 billion has been sanctioned under the scheme. This includes a government grant of Rs 201

billion, of which Rs 78.5 billion has been released. Of the total sanctioned outlay, Rs 282.6 billion is for system strengthening of the sub-transmission and distribution (T&D) network in 3,634 towns across 509 circles, Rs 9.85 billion is for information technology (IT) enablement of discoms, Rs 7.92 billion is for enterprise resource planning, and Rs 8.34 billion is for smart metering and the remaining is for substation monitoring and GIS substations. With respect to feeder monitoring, as of April 2019, of the 36,735 feeders, around 31,707 (86.3 per cent) are being monitored on the national power portal. For registering consumer complaints, 49 public discoms and 11 private discoms have made the short code 1912 operational.

Under the erstwhile Restructured Accelerated Power Development and Reforms Programme (now subsumed under the IPDS), Rs 52.97 billion has been sanctioned (Rs 40.22 billion disbursed) across 1,405 towns for IT Part A; Rs 12.51 billion has been sanctioned (Rs 5.51 billion disbursed) for supervisory control and data acquisition (SCADA) Part A across 59 towns; and Rs 287.84 billion (Rs 70.87 billion disbursed) across 1,227 towns for Part B. In terms of physical progress, go-live status has been achieved in 1,376 towns of the total 1,405 towns. Further, a SCADA system has been deployed in 52 of the 59 towns, and is operational in 25 towns. System strengthening Part B has been completed in 1,190 towns.


Launched along with the IPDS in December 2014, the DDUGJY targets the electrification of all villages and the strengthening of sub-T&D infrastructure in rural areas. As of December 2018, a total of 5,958 projects worth Rs 1,206 billion have been sanctioned under the scheme (covering projects across various plan periods), of which Rs 696.7 billion has been released. On the intensive village electrification front, of a total of 0.78 million villages to be electrified, 0.61 million have achieved 100 per cent electrification (about 78 per cent) while 0.17 million still remain unelectrified.


The Ministry of Power (MoP) launched the NSGM in 2015 to plan and monitor the implementation of policies and programmes for a smart grid. Currently, five smart grid projects are under implementation in the country under the NSGM. These are in Chandigarh, Jharkhand, Odisha and Kerala and entail functionalities such as the deployment of advanced metering infrastructure, outage management systems, demand response systems, etc. The total cost of these projects is estimated to be around Rs 6.85 billion, which includes support of Rs 2.05 billion from the central government. The first phase of the NSGM ended in March 2017. The second phase mission (April 2017 to March 2020) was then launched.

In addition, seven pilot projects which are 50 per cent funded by the MoP have been completed as of January 2019. The remaining three projects are at advanced stages of implementation and are expected to be commissioned soon.

National LED Programme

The National LED Programme was launched in January 2015 by Energy Efficiency Services Limited (EESL) with the aim of promoting the use of efficient lighting technology at affordable rates. The programme has two components – UJALA to provide LED bulbs to domestic consumers with a target of replacing 770 million incandescent bulbs with LED bulbs and the Street Lighting National Programme (SLNP) for replacing 13.4 million conventional street lights with smart, energy efficient LED street lights by March 2019.

Under UJALA, as of April 26, 2019, the total number of LED bulbs distributed across 34 states/UTs was about 350.26 million. The resultant energy savings are estimated to be around 45 BUs per year and the annual cost savings are around Rs 181 billion. Meanwhile, under the SLNP, 8.91 million conventional street lights have been replaced with LED street lights resulting in energy savings of 5,988 MUs per year.

The way forward

To summarise, significant progress has been witnessed under various government schemes but much still remains to be done. The government has proposed UDAY II to fill the gaps left by the previous scheme in the areas of loss reduction and smart metering. Further, discoms now have a bigger responsibility of managing an enlarged network and consumer base as well as controlling AT&C losses which are expected to rise after the implementation of Saubhagya.