When the budget comes, it is common to discuss which sector has received how much money this time. For example, whether the defense budget has increased or not, how much did the Railways get? But apart from all this, this time the government can increase the annual budget for the Revamped Distribution Sector Scheme (RDSS) to about Rs 18,000 crore in the FY27 budget to be presented on February 1. The objective of this scheme, launched in 2021, is to make the country’s electricity distribution system better, cheaper and profitable.
According to Mint report, this year the Power Ministry has proposed to provide about Rs 18,000 crore for RDSS, which the government is considering. The work of installing smart meters is going on at a rapid pace and about 1.5 lakh smart meters are being installed every month. More funds are needed to maintain this pace.
A budget of about Rs 16,000 crore was kept for this scheme in the current financial year (FY26) ending on March 31. This proposed increase has come at a time when power distribution companies are still under pressure. Despite many reforms of the government, they have a total debt of more than Rs 7 trillion. These reforms include the Ujjwal Discom Assurance Yojana (UDAY) launched in 2015 and the proposed Electricity Amendment Bill 2025, which aims to bring more competition in electricity distribution, set stricter operating rules for discoms and give more choices to customers.
Types of RDSS
RDSS has two parts. First, financial assistance for installing prepaid smart meters and system meters, and second, to strengthen and modernize the electricity distribution infrastructure. The total expenditure of this scheme is Rs 3 trillion, which includes the expenditure of the central and state governments. Besides, loans received from government power companies like Power Finance Corporation and REC Limited are also included in this. The central government alone is preparing to spend a total of more than Rs 97,000 crore on this scheme.
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Companies earned money
The Ministry of Power recently said that after almost a decade, the country’s discom companies have become profitable again. Discoms earned a net profit of around Rs 2,701 crore in FY25, while they had a loss of Rs 25,553 crore in FY24. The ministry has attributed this improvement to schemes like RDSS and other changes. Jitendra Kumar Aggarwal, Joint Managing Director of Genus Power Infrastructure, a smart meter manufacturing and services company, said that smart metering has now reached an important phase and it is bringing fundamental changes in India’s power distribution sector. Discoms returning to profitability is a strong sign, and schemes like RDSS have played a big role in this.
He further said that we are already seeing improvement in the efficiency of billing and power supply. Currently, it has reached only a small part of the total customers of the country. As its scope increases, its impact on working capacity, economic condition and customer confidence will be more visible.
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