Union Cabinet gives nod to BharatNet, distribution scheme for power discoms; a brief look

Two days after Nirmala Sitharaman at a press conference announced a slew of relief measures for COVID-19 affected sectors, the Union Cabinet on Wednesday approved the Rs 6.29-lakh crore relief package, Union minister Prakash Javadekar announced. Here’s a look at some of the proposals given assent to by the Cabinet Committee on Economic Affairs (CCEA) and what it means: Rs 19,041 cr viability gap funding for BharatNet in 16 states The Cabinet approved public private partnership mode for the rollout of BharatNet project for broadband services in villages in 16 states with viability gap funding of Rs 19,041 crore, telecom minister Ravi Shankar Prasad said. How much it costs: The total expense will be Rs 29,430 crore to cover around 3,60,000 villages in 16 states, which includes Rs 19,041 crore to be spent by the government for the viability gap funding, Prasad said. Why it matters: The decision to involve private players was taken after Prime Minister Narendra Modi announced on 15 August, 2020, that around 6 lakh villages in the country will be connected with broadband in 1,000 days, Prasad said. He said till date 1.56 lakh out of the 2.5 lakh village panchayats have been connected with broadband. CCEA approves Rs 3.03-lakh crore scheme for power discoms The CCEA also approved a five-year-long reform-based result-linked power distribution scheme worth Rs 3.03 lakh crore. Briefing after the CCEA meet, Power and New & Renewable Energy Minister RK Singh said, “We have done a lot for power distribution reforms. It needs to be strengthened. Today, the Cabinet has approved the new scheme worth Rs 3.03 lakh crore, including Rs 97,000 crore central outlay.” What this means: The Central schemes Integrated Power Development Scheme, Deen Dayal Upadhyaya Gram Jyoti Yojana, and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) will be merged. How much it will cost: Total allocation will be Rs 3,03,058 crore, including Central Government share of Rs 97,631 crore. What it will do: The Reform-Based Result-Linked Power Distribution Scheme was announced in the Budget earlier this year. The funds would be given to power distribution companies (discoms) to strengthen their system. The revamped reforms-based result-linked power distribution scheme will provide financial assistance to discoms for infrastructure creation, up-gradation of system, capacity building and process improvement. It provides state-specific intervention in place of “one size fits all”. How states can avail this scheme: States will have to pre-qualify criteria like publication of audited financial reports, upfront liquidation of state government’s dues/subsidy to discoms and non-creation of additional regulatory assets. What the scheme envisages:

• 25 crore smart meters
• 10,000 feeders
• Four lakh km of low-tension overhead lines planned under the ongoing works under Central Government schemes.

What else was in Sitharaman’s relief package? As part of the package to support the COVID-19 pandemic-hit economy, Sitharaman announced Rs 1.5 lakh crore of additional credit for small and medium businesses, more funds for the healthcare sector, loans to tourism agencies and guides, and waiver of visa fee for foreign tourists. How much it costs: Together with previously announced Rs 93,869-crore spending on providing free foodgrains to the poor till November and additional Rs 14,775 crore fertiliser subsidy, the stimulus package, which is mostly made up of government guarantee to banks and microfinance institutions for loans they extend to COVID-19-hit sectors, totalled up to Rs 6.29 lakh crore. Where the money will go: The finance minister provided Rs 23,220 crore of additional funding to set up children and paediatric care at hospitals to prepare healthcare infrastructure to deal with any emergency arising due to COVID-19 wave hitting children. Further, to incentivise job creation, the government committed to paying the employer and employee’s share to provident fund (PF) for all new recruitments done till March 2022. Previously, the government paid Rs 902 crore for 21.42 lakh beneficiaries of 79,577 establishments. Support for tourism sector With the tourism sector being hit hard by the pandemic, the minister had announced financial support to over 11,000 registered tourists, guides, travel and tourism stakeholders, in addition to free one-month tourist visa to the first five lakh tourists. Other announcements Other announcements included  an extension of tenure of a production-linked incentive (PLI) scheme for large-scale electronics manufacturing by a year and Rs 88,000 crore of insurance cover for goods exporters. Two announcements made by Sitharaman regarding the additional subsidy of Rs 14,775 crore for DAP & PK fertilisers, and extension of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) free food grains from May to November 2021, were previously approved by the Cabinet. With inputs from PTI