MoS for New and Renewable Energy Shripad Yesso Naik
| Photo Credit:
ANI

There is a need for coordinated reforms to address the financial and operational challenges faced by power distribution companies (discoms), according to Shripad Yesso Naik, Union Minister of State for Power and New & Renewable Energy.

He was addressing the 4th meeting of the Group of Ministers (GoM) on Tuesday on power sector reforms, hosted by the Andhra Pradesh government in Vijayawada. Measures like regulatory reforms, restructuring liabilities and leveraging emerging technologies like renewable integration, storage solutions, and artificial intelligence are vital to ensure a resilient and future-ready power distribution system, Naik said. 

He addressed energy ministers and senior officials from States including Uttar Pradesh, Rajasthan, Tamil Nadu, Madhya Pradesh, Maharashtra and Andhra Pradesh. 

Tariff revision

The timely revision of cost-reflective tariffs, strengthening of the Appellate Tribunal for Electricity (APTEL) with sufficient benches, and the implementation of the Fuel and Power Purchase Cost Adjustments are essential to ensure fair pricing and financial stability, the Union Minister said. 

Simplifying and standardising tariff orders and net metering provisions for roof-top solar systems, along with annual tariff revisions linked to inflation indices like WPI, will create a transparent and predictable business environment for utilities and consumers alike, he added.

Naik called for the framing of clear GST policies pertaining to storage systems that allow input tax credits for utilities, along with a well-defined roadmap for expanding Battery Energy Storage Systems (BESS).

He also emphasised on the need for relief measures such as reducing interest rates offered by REC and PFC, along with waiver of prepayment penalties, to ease the debt burden on discoms and asked all States and stakeholders to speed up the implementation of the Revamped Distribution Sector Scheme (RDSS), aimed at modernising distribution networks .

In earlier meetings, the GoM had identified strategies including a comprehensive financial restructuring scheme, enhancing private sector participation, and encouraging the implementation of advanced metering and investment plans. 

These efforts are key to securing both financial health of the sector and its contribution to India’s ambition of becoming a developed nation under the ‘Viksit Bharat’ 2047 vision, the Minister said, according to a release.

Published on April 22, 2025