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Akhilesh Yadav, Chief Minister for the Indian state of Uttar Pradesh, has announced a provision of $1.4 billion in the budget for the state power sector. Approximately half of this will be spent on strengthening the distribution network and adding generation capacity, and just over half will go as a grant to the Uttar Pradesh Power Corporation Limited (UPPCL) to bail it out from an ever-increasing debt.
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Yadav said that the compensatory provision, which was 47 percent more than last year, has been made to ensure that UPPCL provides power at concessionary rates to the consumer.
A major part of the budget allocation is for strengthening the distribution network and upgrading existing power generation plants. The current state government said that although the previous government proposed setting up power plants, these were never developed because of the absence of coal linkages. Yadav said that his government intends to upgrade power plants like Rosa and Lanco power plants. These two power plants have been facing a coal crisis for a considerable time due to a variety of reasons, including coal handling plant needing repair and upgrade. Yadav said that the grant could dramatically improve the availability and reliability of these two plants.
The budget has also allocated $18 million to the Rajiv Gandhi Rural Electrification Scheme, and $18 million to support solar power schemes. $23 million has also been proposed as a lump sum payment of some outstanding electricity bills.