The Jharkhand government has joined Andhra Pradesh in conveying its in-principle approval for joining the Uday (Ujwal Discom Assurance Yojana) scheme for recasting debts of distressed distribution companies (Discoms), it was announced on Sunday.
Andhra Pradesh became the first state in the country to join the Centre’s scheme of debt revival of Discoms.
On receiving this official communication, Piyush Goyal, Union Minister of State (IC) for Power, Coal and New and Renewable Energy has congratulated Chief Ministers of Jharkhand and Andhra Pradesh for joining UDAY.
The Scheme, UDAY has been launched to improve financial and operational efficiencies of power distribution companies (Discoms).
It envisages reducing interest burden, cost of power and transporting losses. Consequently, Discom would become sustainable to supply adequate and reliable power enabling 24x7 power supply. The scheme provides that States would take over 75 per cent debt of Discoms, as on 30 September 2015 in two years.
UDAY has inbuilt incentives encouraging state governments to voluntarily restructure their debts.
These incentives include taking over of Discom debt by the States outside the fiscal deficit limits; reduction in the cost of power through various measures such as coal linkage rationalization, liberal coal swaps, coal price rationalization, correction in coal grade slippage, allocation of coal linkages at notified prices; priority/additional funding through schemes of MoP and MNRE; and, reduction in interest burden.
UDAY is different from earlier restructuring schemes in several ways including flexibility of keeping debt taken over outside fiscal deficit limit, reduction in cost of power and a series of time bound interventions for improving operational efficiency. UDAY provides for measures that will reduce the cost of power generation, which would ultimately benefit consumers.
Discoms in Rajasthan, Uttar Pradesh, Tamil Nadu and Haryana are the biggest loss-making companies, said Goyal.
BW Reporters
Haider Ali Khan is an alumnus of IIMC. He holds a degree in English Journalism from the prestigious campus. His passion includes Aviation, Technology, Politics and Sports.
