Context: Recently, the government has been considering the extension of a scheme aimed at bolstering India's power distribution infrastructure beyond its originally planned five-year duration, with the goal of connecting more households, particularly in rural areas, to the electricity grid.

Revamped Distribution Sector Scheme (RDSS)

• Objective: To enhance operational efficiencies and financial sustainability for DISCOMs.
• Approach: Achieved through result-linked financial assistance, contingent on meeting pre-qualifying criteria and achieving basic minimum benchmarks.
• Budget: The scheme allocates Rs 3,03,758 Crore over 5 years (FY 2021-22 to FY 2025-26), with an estimated Government Budgetary Support (GBS) of Rs 97,631 Crore.
• Nodal Agencies: REC and Power Finance Corporation (PFC) 
• Targets

oReduce AT&C losses to pan-India levels of 12-15% by 2024-25.

oEliminate ACS-ARR gap by 2024-25.

oEnhance the quality, reliability, and affordability of power supply to consumers, fostering a financially sustainable and operationally efficient distribution sector.

• Components

oPart A: Financial support for Prepaid Smart Metering & System Metering and Distribution Infrastructure up-gradation.

oPart B: Training & Capacity Building, along with other Enabling & Supporting Activities.

Significance of RDSS

• The world's largest electrical energy smart metering program aims to replace 250 million traditional meters with smart ones, reducing energy theft and ensuring reliable electricity supply. 
• The reforms also target improving the reliability and quality of supplied power.