Power Sector Update - Cabinet Approves Revamped Distribution Reform Scheme: ICICI Securities
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ICICI Securities Report
The Union Cabinet has approved the revamped, reforms-based and results-linked distribution sector scheme for supporting discoms to undertake reforms and improve performance in a timebound manner, as was announced in the FY22 Union Budget.
The scheme is aimed at providing 24x7 uninterrupted, quality, reliable and affordable power supply and seeks to improve discoms’ operational efficiencies and financial sustainability based on state-specific action plans.
Total outlay for the scheme is Rs 3,038 billion over FY22-FY26. The scheme is positive for all players across the power sector value chain.
We believe this is a precursor to ‘perform or perish’ for inefficient discoms.
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