Import replacement must be accorded priority: Power Minister

01 Jul 2020

The Union Minister of Power and New & Renewable Energy (Independent Charge), Raj Kumar Singh urged the power generators and distribution companies to reduce their reliance on imports by using locally made equipment. Singh made these observations while addressing the power ministers of state governments and UTs through video conference on July 3.

He said that even though India had the necessary facilities and expertise to manufacture for various requirements of the power sector, the country’s import bill for power equipment was around Rs 710 billion in the year 2018-19. This included an import bill of over Rs 200 billion for power equipment imported from China.

“Where we already have manufacturing capacity, we must buy Indian. We had received reports that the equipment being used in some distribution companies was coming from other countries, mainly China. We have issued orders and whatever is manufactured here must get priority in procurement rather than importing that item from abroad,” he later told reporters over video conference.

The Narendra Modi-led National Democratic Alliance (NDA) government has clamped down on imports from its eastern neighbour ever since a bloody skirmish on the night of June 15 between Indian and Chinese troops in Ladakh’s Galwan Valley left several soldiers from both sides dead.

Singh said that as the power sector was of immense strategic value it was vulnerable to cyber-attacks. Therefore, imported equipment would be subjected to thorough checks for malware.

Singh stated that a lot had been achieved in the power sector in the past few years and this included a capacity addition of nearly 15,000 MW per year since 2014 and connecting the entire nation through one grid spanning remote areas like Ladakh. The minister further added that the country’s grid system was among the world’s best and this was amply demonstrated during the lights out event on April 5, 2020, when it successfully handled a steep fall and climb in demand within a very short timeframe.

Making Distribution Companies Viable

The minister said that one of the biggest challenges in the power sector was to make the distribution companies viable. As such, a liquidity infusion of up to Rs 900 billion for distribution companies was extended under the stimulus measures announced by the Govt of India under the Aatmanirbhar Bharat Abhiyan or self-reliant India programme for losses up to March 31, 2020. He informed that demand of about Rs 930 billion was received from states and union territories, and an amount of Rs 200 billion was approved while the remaining claims were also being processed.

Singh told reporters that governments of several states and union territories had requested for extending the Central Government package to cover losses up to June 2020. He said the union government would decide on extending the quantum of support.

The minister also informed that a new scheme would soon be announced after merging the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS). The centre’s funding to states would be conditional under the new scheme. The states or union territories whose distribution companies weren’t incurring losses would not face any problems in getting central funds but those whose distribution companies were in losses would have to submit a plan detailing how they proposed to eliminate losses to get funds. He added that state governments would get some flexibility in the new scheme to enable them to plan according to their specific requirements.

Singh underlined the fact that even after being allocated millions to improve the power sector infrastructure, the same situation kept repeating itself in states due to lack of non-adherence to loss reductions trajectory. The Central Government was now looking at linking funding for the new scheme to reforms.

Singh commended power sector officials for the work done by them during the nationwide lockdown in wake of the COVID-19 pandemic. He said that the country had now achieved a capacity of 370,000 MW in power generation against a demand of 185,000 MW. The country was also supplying electricity to many countries.

Issues about new and renewable energy were also discussed at the conference. The minister said that the government was looking at launching a new variant of the Pradhan Mantri Kisan Urja Suraksha even Utthan Mahabhiyan (KUSUM). The PM-KUSUM scheme was launched by MNRE to support the installation of off-grid solar pumps in rural areas to reduce dependence on the electricity grid. This would help in eliminating the subsidy burden of state governments for irrigation.


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