Recently, the Ministry of Power (MoP) in a meeting with the Fifteenth Finance Commission in New Delhi, proposed measures to support the development of Flue Gas Desulfurization (FGD) infrastructure and India’s electric mobility transition plans.
The meeting was chaired by the Minister for Power, R. K. Singh along with the chairman of the Finance Commission, N.K. Singh. Members of the commission and senior officers of the commission, MoP, and its public sector undertakings were also present.
In the meeting, the MoP proposed a ₹835 billion ($11.70 billion) plan to meet the cost of development of Flue Gas Desulfurization to improve air quality and to conform to new norms notified by the Ministry of Environment Forest and Climate Change (MoEF & CC) for power plants.
FGD is a process to remove sulfur dioxide from exhaust flue gases of fossil-fuel power plants, and the emissions of other sulfur oxide emitting processes such as incineration of waste material.
MoP also proposed a plan to develop electric vehicle infrastructure across 70 cities and 20 highways in the next five years between 2020-25 at a cost of ₹50 billion (~$700 million). In August 2018, Mercom reported that the central government approved a subsidy corpus of ₹55 billion (~$0.78 billion) to be disbursed under the second phase of Faster Adoption and Manufacturing of Electric Vehicles (FAME) program. The FAME II program is also expected to be in force for five years.
Issues such as the impact of the power sector reforms on state finances and the UDAY (Ujwal DISCOM Assurance Yojana) program were discussed. According to the MoP, the fiscal positions of states have been impacted by exposure to guarantees provided to power utilities and other public sector units, including those in the transport sector. The liabilities on account of guarantees provided to power units are significant in a number of states. The statement mentioned that “by assigning a weight of 90 percent to the power sector guarantees and 10 percent to other guarantees, including transport sector guarantees, the extended debt of all states, in aggregate was around 23.3 percent of gross domestic product (GDP) in 2011-12.”
In July 2018, Mercom reported that UDAY program was helping some state-run distribution companies (DISCOMs) stuck in a debt-rut, to come out of the vicious spiral.