Budget 2021: Power sector

The Government of India today announced Capex to the power sector of Rs 5.54 lakh crore in FY22 vs FY21's Rs 4.39 lakh crore. The government announced that power transmission assets of Rs 7,000 crore will be transferred to Power Grid InvIT. The centre will also provide Rs 2 lakh crore to states & autonomous bodies for Capex. 

It announced the plan for a framework that will help consumers choose their electricity supplier and thus, unleash competition. Implementation of this will be a challenge, along with the financial viability of discoms. The alternatives from power distribution will be worked out so that consumers could choose from more than one power distribution companies. 

The government will also create Rs 3 lakh crore funds over five years to assist power distribution companies to reform. This would be much-needed support for the power sector. Under the initiative, the states will have to draw time-bound plans to reform the distribution sector. 

The government also announced National Hydrogen Mission, which will be a booster shot for the renewable energy sector. 

BSE Power index is trading 1.08 per cent higher from its previous close of 2,026.30. Companies such as Adani Green, Power Grid, NTPC, BHEL, Adani Power are trading higher from their previous lows.