Maharashtra to sign agreement to join UDAY scheme

State-run discom's debt is worth Rs 22,000 cr, , including over Rs 13,000 crore as long-term borrowings

Maharashtra, the home state of Union Power Minister Piyush Goyal, has finally taken a decision to join the Ujjwal Discom Assurance Yojana (UDAY). The BJP led government in the state was initially prepared to join UDAY for operational benefits only and was not keen to include financial benefits.

However, the state run Maharashtra State Electricity Distribution Company (MahaVitaran) has sent a revised proposal to the state government for its approval and thereafter the agreement will be signed with the Centre. State energy department official told Business Standard, “The state government expects to soon clear MahaVitaran’s proposal. Thereafter the state will sign agreement with the Centre by October 15.’’

He said with the MahaVitaran’s move to include financial benefits under UDAY the state government will issue the bonds as prescribed under the scheme.

Goyal, on Friday, admitted that Maharashtra has given its in principle approval but is yet to sign an agreement with the Centre for joining UDAY. However, he expects that the government will soon complete the necessary formality.

The UDAY scheme envisages the respective states of loss- making discoms taking over 75 per cent of the state electricity boards’ debts as on 30 September, 2015 over the next two years.  So far 19 states have joined UDAY.

MahaVitaran has a debt of around Rs 22,000 crore, including over Rs 13,000 crore as long-term debt.