Centre Starts Buying Power Equipment For Electrification Drive

New Delhi: In a bid to reduce power rate for consumers and stop arbitrary procurement of transmission equipment by states, the Centre today started procuring equipment for this.

Under the plan, the Centre is procuring equipment for rural electrification drive on a large scale. The equipment, bought under the ambitious electricity for all scheme -- Deen Dayal Gram Jyoti Yojna -- includes 25KVA distribution transformers and transmission cables.  

The Centre claims this will increase transparency and cut down prices by reducing transmission and distribution losses that happens due to inferior quality equipment.

But some states like Uttar Pradesh have objected, saying it violates the federal tenets of the Constitution. Since the states will implement the project at the ground level, the decision should be theirs, they argue.

In a recent interview to NDTV, power minister Piyush Goyal said the states' procurement process for centrally funded schemes "had major issues" in past.

"The tendering process was suspect, there was corruption and delays," he had said. "Centralised procurement will mean quality products. The idea is to make villages electrified soon with equipment which lasts long."

A similar mass procurement exercise was carried out by the Centre earlier for LEDs, which brought down the cost of a bulb from Rs 310 to Rs 64.7. "Each day, the LED scheme is saving consumers Rs 11 crore," he said.  

The good news for consumers is the ministry's assessment that once the cost of equipment comes down, tariff revision might not be needed.

In large states like Uttar Pradesh, Rajasthan, Haryana and Punjab losses due to low-standard products used is a major problem.

The scheme has been received well by the domestic power equipment sector. Members of the Indian Electrical & Electronics Manufacturers' Association claim it will boost domestic manufacturing.

Mr Goyal told NDTV a similar bid is underway to provide energy efficient fans at half price. "We have already procured 11 lakh fans for phase one."