Budget proposes to provide customers option to choose electricity supplier

The Union Budget 2021-22 has taken a futuristic approach on energy sector with stress on renewables, smart metering and use of ‘clean’ technology to generate hydrogen.

The highlight for the energy sector was the announcement of Prime Minister Narendra Modi’s dream project — Comprehensive National Hydrogen Energy Mission — which will help generate hydrogen from green power sources.

Finance Minister Nirmala Sitharaman took cognisance of the bad financial state of DISCOMS (power distribution companies) all over the country. ”The distribution sector, particularly the DISCOMS, are under financial stress. The Ministry intends to promote smart metering. I urge all the states and Union Territories to replace conventional energy meters with prepaid smart meters in the next three years. This would give consumers the freedom to choose the supplier and the rate as per their requirements. I propose to provide about ₹22,000 crore to power and renewable energy sector in 2020-21,” said the finance minister.

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The budget has allocated ₹1,000 crore to Solar Energy Corporation of India (SECI) besides ₹1,500 for Renewable Energy Development Agency. The Budget announced an outlay of over ₹3 lakh crore for smart metering, feeder separation, etc.

The budget also raised duty on solar lanterns from 5 % to 15%.

The PM-KUSUM scheme, which provides solar pumps to farmers, has been expanded with the benefit of the scheme being extended to 20 lakh farmers for setting up stand-alone solar pumps. Besides, the government will help 15 lakh farmers solarise their grid-connected pump sets. There is also a scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands.

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In the energy sector, the disinvestment of BPCL is likely to be completed in FY22 along with monetisation of public sector assets.

For the oil and gas sector, the Budget hiked allocation for expansion of the city gas distribution (CGD) network and Ujjwala scheme.

Ujjwala scheme was meant to distribute 50 million LPG connections to women of Below Poverty Line families. This year, the benefit is likely to be expanded to cover over 1 crore more families, the FM said.

The Union Budget 2021-22 has proposed setting up of an independent gas transmission system operator for the gas sector, just like the Power System Operation Corporation (POSOCO) for electricity. This is expected to facilitate gas exchange with ease.