Madhya Pradesh has taken the lead in undertaking power sector reforms stipulated by the Department of Expenditure of the Ministry of Finance. As part of the reforms, the State has started Direct Benefit Transfer of electricity subsidy to farmers in one district of the state with effect from December last year. Thus, the State has successfully implemented one out of the three stipulated reforms in the power sector.
The Ministry of Finance in a statement said that successful implementation of the reform has made the State eligible to mobilise additional financial resources equivalent to 0.15 per cent of its Gross State Domestic Product. Accordingly, the Department of Expenditure has granted permission to the State to mobilise additional financial resources of Rs 1,423 crore through Open Market Borrowings. It has provided the much needed additional financial resources to the State to fight COVID-19 pandemic.
Power Sector reforms stipulated by the Ministry of Finance aim at creating a transparent and hassle free provision of power subsidy to farmers and prevent leakages. They also aim at improving the health of power distribution companies by alleviating their liquidity stress in a sustainable manner.