UDAY covers 97% of discom debt: Centre
The Union Ministry of Power has announced that about 97% of the total outstanding debt of all state power distribution companies (discoms) has been covered under the Ujwal DISCOM Assurance Yojana (UDAY).
As on September 2015, the total debt of all state-owned discoms was Rs. 3.95 lakh crore. The 26 states and 1 UT which have joined the UDAY scheme accounted for total outstanding debt of Rs. 3.82 lakh crore. Hence, about 97% of the total outstanding debt of all State discoms has been covered under UDAY.
Issuance of bonds: The total liability opted by states for restructuring through the issuance of bonds under the scheme was Rs. 2.69 lakh crore. So far, states have issued bonds of Rs. 2.09 lakh crore and discoms have issued bonds worth Rs. 0.23 lakh crore. Bonds worth Rs. 0.37 lakh crore are yet to be issued by various discoms. Hence, about 86% of the restructurable debt of states has been restructured so far under UDAY.
National average of aggregate technical and commercial (AT&C) losses: It stood at 20.2% in FY17 from all UDAY states. It has increased by two percentage points, from 81% in FY16 to 83% in FY17. The difference between the average cost of supply (ACS) and the average revenue realised (ARR) also has come down in the last year.
About Ujwal DISCOM Assurance Yojana (UDAY)
The UDAY Scheme was launched by Union Power Ministry for the financial turnaround and revival package for electricity distribution companies of India (DISCOMs). It aimed to help to make discoms financially and operationally healthy so they can supply adequate power at affordable rates and play important role in Union Government’s ambition of meeting target of 100% Village electrification and 24X7 Power For All.
Under it, state governments were to take over up to 75% of their respective discoms’ debt by issuing sovereign bonds to pay back the lenders. Remaining 25% of debt will be issued by discoms in the form of bonds.
UDAY envisages to have a permanent solution for past as well as potential future issues of the power sector such as reducing the interest burden on the discoms by allowing the states to take over the bulk of their debt, reduce the cost of power, increase the operational efficiencies of the discoms by providing capital and infrastructure like coal linkages and reduce in AT&C and transmission losses.
The scheme is optional for the states to join. Andhra Pradesh was the first state to join it. Mizoram was 26th state to join UDAY scheme. Nagaland, Odisha and West Bengal are only three states that have not joined the scheme.
Month: Current Affairs - July, 2017