Uday to be modified to include states without discoms

Power Ministry's bailout initiative targets states with stressed discoms

Uday, a scheme rolled out by the power ministry to bail out financially stressed discoms, will be modified soon to accommodate 12 states that don't have their own distribution company.

“These 12 states are not eligible to fall under the Uday scheme as they don’t have their discoms. I am looking at modifying it to accommodate them as well,” said Union power, coal and renewable energy minister Piyush Goyal here on Thursday during an event.

He said the scheme was not only a bailout programme but a show of ‘collaborative federalism’ as advocated by the government.

While the minister did not cite a deadline for the scheme to be modified, he said, “Uday ensures the discoms don't run into losses in the future as well.”

According to him, since the onus of running the discoms efficiently falls on states, they will ensure its financial health.

Since the scheme was rolled out in November last year, 15 states have joined covering 90 per cent of the entire discom’s debt of Rs 4.3 lakh crore while three states —Jharkhand, Chhattisgarh and Rajasthan — have signed a memorandum of understanding with the Centre.

He said West Bengal had given an ‘in-principle verbal assurance’ to join the scheme. According to Goyal, the country can save Rs 1.8 lakh crore each year if the states consent to join Uday.

The power ministry is stressing on securing fuel-supply agreements and contracts for power generation, tackling the impending problem of loss-making discoms, and increasing power transmission lines in the country.