The power sector of India is expecting a major change in the country as two leading Public Sector Utilities – National Thermal Power Corporation & Power Grid Corporation of India form a Joint Venture to set up a National Electricity Distribution Company.
This development will open doors for NTPC – a leading generator & Power Grid – organization that owns India’s largest Transmission Network, to enter into consumer electricity supply business. This move can mean that going ahead the business of content & carriage can be separated, something which has also been discussed in the Electricity Act, 2003 Amendments which yet to be tabled in the parliament.
As and when the proposed changes have implemented the power infrastructure company and power supply company will be two individual entities, which will bring more competition in the power distribution sector with more than one power supplier in the market.
The Joint Venture is said to be 50:50 equity basis for setting up National Electricity Distribution Company Ltd (NEDCL). The main objective of the which will be to undertake the business for distribution of electricity in distribution circles in various states and Union Territories and other related activities.
The announcement might be in sync with the earlier news of the existing sector reform scheme UDAY has been declared unsuccessful by several agencies. The UDAY scheme was launched in 2015, which aimed at turning around the state-owned discoms fate financially & operationally. At the end of FY 19, the losses of the state-owned discoms grew by 40% to INR 21,658 and dues of discoms to power gencos was that of INR 38,023 crores.