Jharkhand Became First State To Officially Join UDAY Scheme

Jharkhand became one of the very first state to officially join the Ujwal Discom Assurance Yojana (UDAY) central government’s financial restructuring programme for discoms, which will offer the state a net benefit of approximately Rs 5,300 crore.

The Memorandum of Understanding (MoU) was signed between Union Ministry of Power, Jharkhand department of energy and Jharkhand Bijli Vitran Nigam Limited (JBVNL) on Tuesday (December 5) in the presence of Raghubar Das, Chief Minister of Jharkhand.

Chief Minister Raghubir Das said the state will take over 75 per cent of debt of its power distribution company Jharkhand Bijli Vitaran Nigam Ltd. The state will also repay outstanding debt of JBVNL to central public sector firms Coal India and Damodar Valley Corporation.

As per the clause of the scheme, the energy department of Jharkhand will take over 100 per cent liabilities of outstanding dues with Central Public sector Units and 75 per cent of the outstanding debts of JBVNL as existing on September 30, 2015.

The memorandum is expected to help the state in electrifying remaining 2,200 villages in state. The BJP led government in the state is also planning to provide off-grid power in 434 villages due to their geographical barriers.

With the memorandum coming into effect the balance debt would be repaid with fresh State guaranteed Distribution companies bonds to be issued at coupon rates around 3 per cent less than the average existing interest rate. As a special dispensation, the JBVNL would also be able to wipe out its outstanding dues amounting to Rs 6000 crore to the Central Public Sector Undertakings.

The JBVNL would have annual savings of almost Rs 115 crore. Waiver of outstanding dues to central government power generators will help the state utility save surcharge of Rs 1,000 crore annually.

Jharkhand chief secretary Rajeev Verma said Uday scheme promises to be transformational for the state. He said JBVNL needs Rs 9,500 crore to upgrade its power distribution network and another Rs 9,000 crore for transmission network.