Revamped Distribution Sector Scheme (RDSS)
Background and Context
India has achieved universal electrification—almost every household is connected to the grid. But the real problem now lies in the distribution sector (DISCOMs), which often face huge losses, poor efficiency, and financial unsustainability.
High AT&C losses (Aggregate Technical and Commercial losses) and the gap between Average Cost of Supply (ACS) and Average Revenue Realized (ARR) make DISCOMs financially weak. If DISCOMs are weak, the whole power sector becomes unstable.
Thus, to strengthen distribution—the last mile of electricity delivery—the Government launched the Revamped Distribution Sector Scheme (RDSS).
Quick Facts
- Purpose: Improve operational efficiency and ensure financial sustainability of DISCOMs.
- Tenure: Till 2025–26.
- Implementing Agencies:
- REC (Rural Electrification Corporation)
- PFC (Power Finance Corporation)
- Exclusion: Private sector DISCOMs are not eligible.
Objectives of RDSS
- Reduce AT&C losses to 12–15% at the national level.
- Bring the ACS–ARR gap to zero by 2024–25.
- Improve quality, reliability, and affordability of electricity supply.
- Make distribution financially sustainable and operationally efficient.
Salient Features
- Background: It subsumes earlier schemes like:
- Integrated Power Development Scheme (IPDS)
- Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
- Prime Minister’s Development Package (PMDP)-2015
- Two Major Components:
- Part A – Result-linked financial assistance to DISCOMs.
- Part B – Training, capacity building, and enabling activities.
Smart Metering Priority
The scheme strongly pushes for smart prepaid meters because they empower consumers and reduce theft/leakages.
- Priority Areas:
- 500 AMRUT cities with AT&C losses > 15%.
- All Union Territories (UTs).
- MSMEs, industrial and commercial consumers.
- All Government offices at Block level and above.
- Other high-loss areas.
- Incentive to States/UTs: Fast-track prepaid smart meters by December 2023.
- Mode: Prepaid smart metering to be implemented in PPP (Public-Private Partnership) mode.
Consumer Empowerment and Technology Use
- Consumers can monitor usage through prepaid meters, avoiding sudden bill shocks.
- Use of Artificial Intelligence (AI):
- Analyze real-time data from IT/OT devices, system meters, and prepaid meters.
- Helps detect theft, reduce losses, and improve efficiency.
Universal Coverage under RDSS
- The scheme provides universal coverage, even to households missed under SAUBHAGYA.
- Special support to Particularly Vulnerable Tribal Groups (PVTGs):
- Under PM-JANMAN (Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan), PVTG households will get on-grid electricity connections with funding from RDSS.
Financial Assistance under RDSS
- Conditions for assistance:
- Upgrade distribution infrastructure.
- Ensure prepaid smart metering and system metering.
- Smart Metering Assistance:
- Special Category States: ₹1350 or 22.5% per consumer meter (whichever is lower).
- Other States: ₹900 or 15% per consumer meter (whichever is lower).
- Other Works Assistance:
- Special Category States: Up to 90% of approved cost.
- Other States: 60% of approved cost.
Significance of RDSS
- Strengthens financial health of DISCOMs.
- Empowers consumers with choice, transparency, and control over electricity usage.
- Promotes digital and smart power infrastructure.
- Supports energy access for the most vulnerable (PVTGs).
✅ In summary:
RDSS is not just about electrification—it is about making the electricity distribution system efficient, financially sustainable, consumer-friendly, and technologically advanced. It is the bridge between India’s universal electricity access and its dream of 24×7 reliable power for all.