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Detailed vision of 2012 related to distribution sector
The poor financial health of bulk power purchasers (SEBs/State utilities) is a major roadblock in the development of the sector. The continuously rising commercial losses of SEBs have touched Rs.26,000 crores in 2000-01. They owe to Central Power utilities, Railways and coal companies, nearly Rs.40,000 crores. This payment deficit continues to rise and threatens the viability of the Central power utilities.
The inability of SEBs to pay has been the basic reason for poor private investment, both domestic and foreign, in spite of liberalisation of polices at Central Government level. Till the health of the SEBs improves, major investment from the private sector cannot be expected. The poor financial health of SEBs also seriously affects their ability to invest in new generation capacity, to upgrade their Transmission & Distribution network and to undertake system improvement. Distribution is the weakest link in the chain of power supply. Hence distribution reforms have been identified as the key area of focus in the power sector reform process. The initiatives taken in this regard include: 
Development of district level distribution improvement plans for all districts in the country All the districts in the country will have a detailed distribution improvement plan. The Ministry/CEA will help the States in capacity building measures in areas related to technical and commercial activities as well as planning and development of personnel. Assistance would also be provided to SEBs to improve their accounting practices. The Expert Committee on Distribution has prepared technical manuals for project formulation, energy audit & accounting, technical specification of equipments and training. NTPC, CPRI, NPC, WAPCOS and POWERGRID have been assigned the task of capacity building in SEBs, guide them to prepare DPR, train the manpower and also supervise the execution of works in the identified circles in each States, A meeting was help with these five organisations in July 2001 wherein it was agreed that (a) the technical manual prepared by the Expert Committee be sent to all the States for guidance (b) each of these organisations be assigned certain States (c) these organisations would station their team in assigned States (d) the team would identify the area of data collection and under their supervision get the necessary data collected through the counterpart team set up at the SEB level as well as the circle level (e) analyse the data in the presence of the counterpart team using the appropriate software (f) obtain computer aided HVDS model (g) help the SEB, thereafter, to prepare DPR (h) train the manpower. In other words, the State officials will collect the data, analyse the same using computer software and prepare DPR under the supervision and guidance of these organisations. Such an approach will help in capacity building through on the job work and also through training. The Ministry of Power is preparing the detailed scope of work for these organisations, time frame for each activity, methodology and deliverables in order to operationalise the project preparation for each of the identified circles.
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