Finance Minister allocates Rs 22,000 crore for power, renewable energy sector, discom reforms in Budget 2020

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In her Union Budget 2020-21 speech, finance minister Nirmala Sitharaman announced the government allocating Rs 22,000 crore for energy sector. The union budget 2020 has proposed that the National gas grid will be expanded from 16,200 km to 27,000 km.

“Further measures to reforms Discoms (distribution companies) would be taken. I propose to provide Rs 22,000 crores to power and renewable energy sector for 2020-2021,” Finance Minister, Nirmala Sitharaman said during the Union Budget speech 2020-2021.

“Taking electricity to every household has been a major reform of the Government. However, the distribution sector, particularly the DISCOMs are under financial stress. The Ministry (of Power) intends to promote smart metering. I urge all the state and union territories to replace conventional electricity meters by pre-paid smart meters in next three years. Also, this would give consumers the freedom to choose the supplier and the rate as per their requirements. This is a very important step in reaching electricity to all people,” Sitharaman said.

This new reform is aimed at addressing the requirements that power distribution companies have for ensuring 24×7 supply. The scheme will have assistance for reduction of transmission losses in terms of technology and modern equipment.

For the oil and gas sector, Sitharaman said, “The open acreage license policy (OALP), is a success having awarded 1.37 lakh square kilometers for exploration to private sector and to Central Public Sector Enterprises (CPSEs). City gas distribution rights are also awarded.”

“Further, it is proposed to expand the national gas grid from the present 16,200 kilometers to 27,000 kilometers. To deepen the gas markets in India, further reforms will be undertaken to facilitate transparent price discovery and also ease of transactions,” she added. In January 2020, the Chairperson of the Petroleum and Natural Gas Regulatory Board (PNGRB) assured that the country’s natural gas exchange will become operational in 2020 itself.

Sitharaman also said that a proposal is under consideration for setting up a large solar power capacity, alongside the rail tracks on the land owned by railways. The government has also proposed Rs 27,300 crore for development of industry and commence for year 2020-21, said Ms Sitharaman.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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