Efforts would also be made to privatize a number of discomforts in major states such as Uttar Pradesh, Gujarat, Haryana, Karnataka , Madhya Pradesh, Jharkhand and Assam.
To pave the way for efficiency, the government plans to privatize electricity distribution companies in the Union Territories (UTs) by January 2021, sources said.
Efforts would also be made to privatize a number of discomforts in major states, such as Uttar Pradesh, Gujarat, Haryana, Karnataka , Madhya Pradesh, Jharkhand and Assam, to improve the governance of these state-run entities.
The Center announced in May that power departments and distribution utilities in the Union Territories (UTs) would be privatized. Finance Minister Nirmala Sitharaman then said that the Center hopes that the privatization of UT discoms will “provide a model of emulation for other utilities across the country.”
Among all the discoms that supply power to the UTs, the largest is located in Jammu and Kashmir, which owed Rs 5.443 crore to the power generators as of March-end. The aggregate technical and commercial losses — a power pilferage indicator — of the newly formed UT are 48 per cent compared to the national average of 19 percent.
The Union Government has been pushing discomfort to increase the involvement of the private sector in order to achieve greater efficiency. As stated earlier by FE, the Prime Minister’s Office directed the Ministry of Power to “remove unnecessary and burdensome monopolies and promote investment and involvement by the private sector” in the distribution of electricity. Sources said that in order to achieve this objective, joint ventures between CPSUs and private players are also being considered in the power distribution sector.
The government has already developed plans to allow multiple private franchisees in each area, while state-run utilities will continue to own the network. The model, however, falls short of complete privatization. In countries where privatization does not seem feasible, the commissioning of independent directors is proposed to improve corporate governance of discomfort.
