Andhra Pradesh has become the first state in the country to join the Centre’s scheme for revival of debt stressed power distribution companies after the state gave in-principle nod to the Power Ministry for joining UDAY.
(UDAY – Ujwal DISCOM Assurance Yojana)
- Andhra Pradesh has been followed by Jharkhand by which latter has become the second state to join the Centre’s UDAY.
- The scheme is optional and operationalised through signing of MoU between State Governments, State Discoms and Centre.
About UDAY Scheme
UDAY was approved by Narendra Modi on 5th November 2015 to provide financial turnaround and revival of Power Distribution companies (DISCOMs). It envisages reducing interest burden, cost of power and AT&C losses.
- Under the UDAY scheme, state governments which own the distribution utilities, would take over 75% debts of Discoms as on 30th September, 2015 in two years and pay back the lenders by selling bonds. For the remaining 25%, discoms will issue bonds.
Incentives providing by UDAY to encourage State Governments
- Taking over of DISCOM debt by States outside the fiscal deficit limits.
- Reduction in the cost of power through various measures such as coal linkage rationalisation, liberal coal swaps, coal price rationalisation, correction in coal grade slippage, allocation of coal linkages at notified prices.
- Priority funding through schemes of Ministry of Power (MoP) and (Ministry of New and Renewable Energy) MNRE.
Jharkhand CM – Raghubar Das
Andhra Pradesh CM – N. Chandrababu Naidu