GoM to vet National Tariff Policy
Home minister Amit Shah will head a group of ministers to discuss the proposed National Tariff Policy that is being awaited as a major reform by the stressed power sector but being opposed by state governments and discoms due to clauses like penalties for load shedding. The inter-ministerial group will have 10 ministers, including eight in cabinet rank and two with independent charge, people familiar with the development said.
- Defence minister Rajnath Singh, finance minister Nirmala Sitharaman, road and transport minister Nitin Gadkari, coal and mines minister Pralhad Joshi, women and child development minister Smriti Irani, agriculture minister Narendra Singh Tomar, and Jal Shakti minister Gajendra Singh Shekhawat are part of the GoM.
- The central government in the proposed draft amendments to the National Tariff Policy of 2016 has included provisions for imposition of penalties by appropriate commission on the distribution companies for power cuts other than force majeure conditions or technical faults.
- The draft policy was sent for approval to the cabinet secretariat, and later it was referred to the GoM headed by Shah.
- The draft policy has proposed that any subsidy would have to be given through direct benefit transfer, i.e. directly in the bank account of consumers. Also, cross subsidies on industries would not exceed 20%.
- It has been proposed that state electricity regulators shall not allow discoms to pass through transmission and commercial losses beyond 15% in consumer tariffs.
- It has also called for simplification of tariff categories and rationalisation of retail electricity tariffs.