Politics · India · 5 hrs ago
India seeks five-year extension of power system fund
India’s power ministry has asked the Cabinet to continue the Power System Development Fund for five years, from FY27 to FY31.
The fund pays for projects that help keep the country’s electricity grid stable, secure and reliable.
It can support investments that utilities may not find commercially viable, including transmission systems, protection equipment and modernisation work.
Approval would extend the fund beyond its current FY22-FY26 period, which received an allocation of ₹11,000 crore.
India’s growing renewable energy capacity increases the need for grid support, storage and protection systems because renewable power can vary.
A March report by Crisil Ratings said slow expansion of transmission infrastructure could put more than 35 GW of capacity at risk of being curtailed in fiscal 2027.
Prolonged curtailment could affect renewable energy projects’ returns and ability to meet debt payments.
The Cabinet’s decision on the proposed extension has not been stated.
India’s power ministry has sought Cabinet approval to continue the Power System Development Fund for five years, from FY27 to FY31.
The fund supports projects intended to improve the reliability, security and stability of India’s electricity grid.
The Union budget for FY27 earmarked around ₹1,103 crore for the fund.
Eligible projects include strategic transmission systems, protection schemes and upgrades to transmission and distribution networks.
A Crisil Ratings report warned that grid constraints could put more than 35 GW of capacity at risk of curtailment in fiscal 2027.
- Who
- India’s power ministry has sought the extension. Cabinet approval is being requested.
- What
- The ministry seeks to continue the Power System Development Fund for five years.
- When
- The proposed period is FY27–FY31, the 16th finance commission cycle.
- Where
- India.
- Why
- The fund supports grid reliability, security and stability, including projects that may not be commercially viable for utilities.
This story does not have two clearly opposing sides.
Cabinet approval was given for the fund’s 15th finance commission cycle, FY22–FY26, with an allocation of ₹11,000 crore.
The power ministry sought Cabinet approval to continue the fund for the 16th finance commission cycle.
- Proposed extension
- FY27–FY31
- FY27 budget earmark
- Around ₹1,103 crore
- Previous-cycle allocation
- ₹11,000 crore for FY22–FY26
- Grid-curtailment risk
- More than 35 GW of capacity in fiscal 2027
Sources
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