Cross-subsidy on power should go: Niti Aayog

Cross-subsidy on power should go: Niti Aayog

Federal policy think-tank Niti Aayog has pitched for letting power utilities realize full market price from all consumers by doing away with cross-subsidy provided to poor consumers.

The recommendation is part of a new draft energy policy Niti Aayog unveiled late on Tuesday. The draft policy also projected that India’s power demand will go up more than four-fold by 2040 on account of strong economic growth. At present, the power demand is about 1.1 trillion units.

“Any fear of a rise in price to vulnerable customers should be addressed by subsidy on power use through Direct Benefit Transfer (DBT). Distribution companies should pay full market-determined price to generation companies and receive the same from customers with the latter compensated through DBT,” Niti Aayog said. At present, industrial consumers cross-subsidise residential users and farmers. Read More…

 

Credit By : Livemint

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