The Union Budget 2021 presented today (February 1, 2021) has allocated a higher Rs.1,455 crore towards specific power system strengthening projects in FY22.
This allocation would be spent on various activities like Smart Grids, Green Energy Corridors and specific power transmission projects in UT of Jammu & Kashmir, Sikkim and northeastern states.
Out of the total expenditure on power system strengthening projects, budgeted at Rs.1454.95 crore for FY22, Rs.1,440 crore is revenue expenditure and the remaining Rs.14.95 crore, capital expenditure. Under the same head, the revised expenditure for FY21 is Rs.819.67 crore, significantly lower than the budgeted Rs.1,843 crore.
An allocation of Rs.600 crore (to be used as revenue expenditure) has been earmarked for strengthening of transmission systems in the states of Arunachal Pradesh and Sikkim, for FY22. In FY21, the budgeted revenue expenditure on this project was Rs.800 crore. However, as per the revised estimates, only Rs.300 crore is likely to be spent in FY21. The higher allocation for FY22 is more of expenditure carried forward from the previous year.
For a similar project in northeast India (excluding Sikkim and Arunachal Pradesh), the estimated revenue expenditure in FY22 is Rs.335 crore. Though the budgeted revenue expenditure for FY21 was Rs.430 crore, the revised estimates for FY21 put this number much lower at Rs.81 crore.
Overall allocation
The overall expenditure on Central Government Schemes and Projects under the power ministry is estimated to be Rs.11,009.12 crore in FY22. This includes revenue expenditure to the extent of 86 per cent. The major ongoing schemes related to the power ministry are power system strengthening projects (discussed above), Deen Dayal Upadhyaya Gram Jyoti Yojana (village electrification) and the Integrated Power Development Scheme.
This expenditure of Rs.11,009.12 crore in FY22 is 43.3 per cent higher than the expenditure in FY21 (revised estimate). The budget estimate in FY21 was Rs.12,327.16 crore.
Lower capex by PGCIL
Power Grid Corporation of India Ltd (PGCIL) is expected to incur capital expenditure of Rs.7,500 crore in FY22, according to the Expenditure Budget document. This would be lower than Rs.10,500 crore in FY21 and Rs.15,313 crore in FY20. PGCIL, being a profitable entity, there is no budgetary allocation from the Centre. All the capital expenditure proposed by PGCIL would be met through internal and extra-budgetary resources (IEBR).
All the Central PSUs in the power ministry are expected to spend Rs.59,990.52 crore in FY22 as against the revised estimate of Rs.50,311.03 crore in FY21, an increase of 19 per cent.
(Featured photograph (source: Sterlite Power) has been used for illustration only)