Power crisis

Discoms can pose risk for state government finances

The audit of state-owned power distribution companies (discoms) for the fiscal year 2018-19 shows that the Ujwal DISCOM Assurance Yojana (UDAY) has failed to attain most of its stated objectives. It is likely that the government will once again need to make a large intervention, which would naturally dent general government finances at a time when a pandemic-hit economy needs support. UDAY was expected to turn around the discoms at both the operational and financial level. Accordingly, states took over 75 per cent of the debt of discoms worth over Rs 2 trillion, which pushed up their debt stock. The