UDAY list grows to 26 as Kerala, Tripura, Arunachal become part of it

Twenty six states -- including Kerala, Arunachal Pradesh and Tripura -- are now part of the Ujwal Discom Assurance Yojana (UDAY) scheme, meant for the revival of debt stressed Discoms.

"An overall net benefit of approximately Rs 4,178 crore, Rs 309 crore and Rs 810 crore would accrue to the states of Kerala, Arunachal Pradesh and Tripura respectively, by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C and transmission losses, interventions in energy efficiency, etc during the period of turnaround," a Power Ministry statement said.

The Government of India, Kerala and Kerala State Electricity Board Ltd signed a Memorandum of Understanding (MOU) under the Scheme Ujwal Discom Assurance Yojana (UDAY) for operational improvement of the Power Utility on March, 2 2017.

Arunachal Pradesh and Tripura also joined the scheme for operational improvement of the States' Power Distribution Departments here today. With this, the total count of states under UDAY reaches 26, it said.

Power Minister Piyush Goyal said,"UDAY is the most comprehensive power sector reform ever planned and executed in the country. It is a classic example of comprehensive, cooperative, collaborative, competitive, consensual and compassionate federalism."

"We have a deep focus on monitoring and accountability and are working towards a clear strategy with visionary goals for which the roadmap has been drawn with a view to bring in efficiency in the whole power sector value chain," he added.

The reduction in AT&C losses is likely to bring additional revenue of around Rs 92 crore, Rs 279 crore and Rs 554 crore to Kerala, Arunachal Pradesh and Tripura respectively during the period of turnaround.

Besides, Kerala is expected to benefit by around Rs 3,600 crore and Tripura around Rs 156 crore due to coal reforms.

The gain is expected to be around Rs 480 crore, Rs 26 crore and Rs 96 crore for Kerala, Arunachal Pradesh and Tripura respectively due to demand side interventions.

According to a presentation made by Rural Electrification Corp on the scheme, state bonds worth Rs 2.09 lakh crore and Discom bonds worth Rs 0.24 lakh crore have been issued till date.

Under the scheme, the states are to repay 75 per cent of debt by issuing bonds while for remaining 25 per cent loans, Discoms are required to raise funds through issuance of securities.

The analysis of the performance reveals that under the scheme, 85 per cent of the debt has been restricted through issuance of bonds out of total debt of Rs 2.72 lakh crore under consideration.

As per REC estimates, Rs 3.82 lakh crore is the total debt of states/UTs participating in UDAY scheme (25 states and 1 UT) as on September 30, 2015. This is 97 per cent of total Discoms' debt. The total debt of the state-owned Discoms in the country as on September 30, 2015, was Rs 3.96 lakh crore.

Under the scheme, states like Andhra Pradesh, Bihar, Assam, Haryana and Jharkhand reduced power purchase cost up to 35 paise, 16 paise, 12 paise, 10 paise and 8 paise per unit respectively in October-December quarter this fiscal compared to 2015-16.

Besides, the Aggregate Technical and Commercial loss of UDAY states has reduced to 22.5 per cent in April-December this fiscal, from 24 per cent in in FY'16.

It was also found that 9 Discoms of 7 states have reported reduced state subsidy dependence in April-December period this fiscal compared to the previous financial year.