Government is planning to set up a National Electricity Fund to help quicken the pace of transmission and distribution reforms in the power sector, the lok sabha was told on Friday.

A proposal for setting up of national electricity fund (interest subsidy scheme) to provide interest subsidy for the loans taken by the utilities/departments/state electricity boards is before the cabinet, power minister Sushilkumar Shinde said during question hour in the house.

The fund is expected to service works undertaken to strengthen and upgrade sub-transmission and distribution network in order to reduce AT&C losses and service increased load.

"The states, which have undertaken certain fundamental reforms in the electricity sector are proposed for being eligible to avail interest subsidy and quantum of interest subsidy is proposed to linked to performance of the utility on reduction in AT&C losses, reduction in gap between actual cost of supply and average revenue realisation, provision of return on equity and multi-year tariff," Shinde said.

Other interventions for reducing commercial losses are incorporation of specific provisions in the electricity act, 2003, for detection of theft of electricity, speedy trial of theft related offences and recovery of the charges of electricity stolen, he said.

Administrative measures also include constitution of special courts for speedy trial of offences committed under the electricity act, Shinde said, adding that such courts have been set up in 24 states.