Bhopal: Madhya Pradesh has taken the lead in undertaking power sector reforms stipulated by the Union government’s department of expenditure, ministry of finance. The State has started Direct Benefit Transfer (DBT) of electricity subsidy to farmers in one district of the state from December, 2020. Thus, the State has successfully implemented one out of the three stipulated reforms in the power sector.
Successful implementation of the reform has made the state eligible to mobilise additional financial resources equivalent to 0.15 percent of its Gross State Domestic Product (GSDP). 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. This 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. As per the guidelines issued by the Department of Expenditure, the States undertaking reforms in power sector are granted permission to raise additional financial resources of up to 0.25 percent of the GSDP.
MP has implemented DBT Scheme for agricultural consumers in Vidisha from December, 2020. An amount of Rs. 32.07 crore was transferred to the bank accounts of 60,081 beneficiaries in the month of December, 2020. Process to implement the DBT scheme in Jhabua and Seoni districts has also been initiated. Based on the outcome from implementation of the scheme in 3 districts in Phase-I, the scheme is expected to be rolled out in the entire State in the financial year 2021-22.
Four citizen centric areas for reforms
The States get permission to raise additional funds equivalent to 0.25 percent of GSDP on completion of reforms in each sector. The four citizen centric areas identified for reforms are Implementation of One Nation One Ration Card System, Ease of doing business reform, Urban Local body/ utility reforms and Power Sector reforms.
Till now, 14 States have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions. Out of these, 11 States have implemented the One Nation One Ration Card System, 8 States have done ease of doing business reforms, 4 States have done local body reforms and Madhya Pradesh has implemented power sector reforms.
