Cabinet extends Uday discoms' debt scheme date for states

The union cabinet on Wednesday extended the date for states to join the Uday debt restructuring scheme for electricity distribution companies to March 31, 2017, to enable all states and union territories to participate in the central initiative.

"March 31, 2016, was the date for states to sign the Uday (Ujwal Discom Assurance Yojana). Most states have signed, only one or two states remain," Finance Minister Arun Jaitley told reporters here following the cabinet meeting.

"The cabinet today (Wednesday) decided to extend the date for signing Uday to March 31, 2017," he added.

The scheme envisages taking over 75 per cent of discoms' cumulative debt. States would issue loans against the debt at prevailing market rates.

The balance 25 per cent would be issued as sovereign backed bonds by discoms.

So far, 19 states have joined the scheme, an official statement here said.

The discoms have total outstanding debt of Rs 4.3 lakh crore as on September 30, 2015.

States that have joined Uday issued bonds of nearly Rs 1 lakh crore in 2015-16 under the scheme to clear 50 per cent of the outstanding debt, a power ministry statement said.

"Further, DISCOM Bonds worth Rs 11,524 crore were floated. In the year 2016-17, bonds worth Rs 14,801 crore have been floated by Uttar Pradesh," it added.

A cabinet communique said Uday envisages a permanent resolution of past as well as potential future issues of the sector.

"It empowers discoms with the opportunity to break even in the next 2-3 years."

The initiative also involves improving the operational efficiencies of discoms, it added.

--IANS

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