Prime Minister Modi Takes Stock of the Power Sector Amid COVID-19 Lockdown

Prime Minister Narendra Modi recently held a meeting to take stock of the power sector amid the COVID-19 pandemic.

In the meeting, the Prime Minister discussed various measures and long-term reforms for enhancing sustainability, resilience, and efficiency of the sector. The meeting was attended by the Home Minister, Finance Minister, Minister of State for Power, and Minister of State for Finance along with senior government officials.

Among many other things, the discussions included measures regarding the ease of doing business, wider adoption of renewables, flexibility in the supply of coal, increasing the role of public-private partnerships, and taking measures to boost investments in the power sector.

Apart from these, PM Modi stressed the role of the power sector in propelling the economy. The role of effective enforcements of contracts for attracting the private sector was also discussed in the meeting.


He also stressed the role of the consumer-centric approach and asked everyone to work toward the goal of supplying round-the-clock high quality and reliable power to all consumers. In the meeting, measures for improving the effectiveness of distribution companies, including tariff rationalization, and the timely release of subsidies were also discussed.

Power is designated as an essential service by the Ministry of Home Affairs, and power generators (including renewables) in the country have been ordered to maintain an uninterrupted supply of power across states. The supply should be continuous even if the distribution companies deposit Letters of Credit for 50% of the cost of power they want to be scheduled. For payments delayed beyond 45 days (from March 24, 2020, and June 30, 2020), the late payment surcharge has now been reduced to 12% per annum from the earlier 18%.

In a recent article, Mercom recently shed light on the financial inefficiency of the distribution companies and their inability to pay the generators during this tough time.

The government has announced various relaxations for the renewable power industry in the past few weeks to help them navigate through this phase.

For instance, the Ministry of New and Renewable Energy (MNRE) issued a blanket commissioning time extension for all renewable energy projects under construction in the country on account of the nationwide lockdown. The Ministry’s notice, issued on April 17, 2020, directed renewable energy implementing agencies to grant an extension of time for projects amounting to the total period of the lockdown plus 30 days for normalization.

The power sector, along with the other sectors, has been hit hard by the coronavirus pandemic and the subsequent lockdown. Find out all about the impact of the pandemic on the renewable sector on Mercom’s live updates page by clicking here.

Image credit: PIB