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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
UDAY for Financial Turnaround of Power Distribution Companies
Dec 05, 2015

The Union Cabinet given its approval to a new scheme moved by the Ministry of Power—Ujwal DISCOM Assurance Yojna or UDAY. UDAY provides for the financial turnaround and revival of Power Distribution companies (DISCOMs), and importantly also ensures a sustainable permanent solution to the problem.

  • UDAY is another decisive step furthering the landmark strides made in the Power sector.The weakest link in the value chain is distribution, wherein DISCOMs in the country have accumulated losses of approximately Rs. 3.8 lakh crore and outstanding debt of approximately Rs. 4.3 lakh crore (as on March, 2015).

  • Financially stressed DISCOMs are not able to supply adequate power at affordable rates, which hampers quality of life and overall economic growth and development.

  • Efforts towards 100% village electrification, 24x7 power supply and clean energy cannot be achieved without performing DISCOMs.

  • Default on bank loans by financially stressed DISCOMs has the potential to seriously impact the banking sector and the economy at large.

  • UDAY is an example of the utilization of the best principles of cooperative and competitive federalism and has been evolved through discussions at the highest levels with multiple States.

  • Adopting UDAY is optional for States, but provides the fastest, most efficient and financially most feasible way for providing 24X7 Power for All. 

  • It will be operationalized through a tri-partite agreement amongst the Ministry of Power, State Government and the DISCOM.

Salient Features 

  • States shall take over 75% of DISCOM debt as on 30 September 2015 over two years - 50% of DISCOM debt shall be taken over in 2015-16 and 25% in 2016-17.

  • Government of India will not include the debt taken over by the States as per the above scheme in the calculation of fiscal deficit of respective States in the financial years 2015-16 and 2016-17.

  • States will issue non-SLR including SDL bonds in the market or directly to the respective banks/ Financial Institutions (FIs) holding the DISCOM debt to the appropriate extent.

  • DISCOM debt not taken over by the State shall be converted by the Banks / FIs into loans or bonds with interest rate not more than the bank’s base rate plus 0.1%. Alternately, this debt may be fully or partly issued by the DISCOM as State guaranteed DISCOM bonds at the prevailing market rates which shall be equal to or less than bank base rate plus 0.1%.

  • State DISCOMs will comply with the Renewable Purchase Obligation (RPO) outstanding since 1st April, 2012, within a period to be decided in consultation with Ministry of Power.

  • States accepting UDAY and performing as per operational milestones will be given additional / priority funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY),Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF) or other such schemes of Ministry of Power and Ministry of New and Renewable Energy.

  • Such States shall also be supported with additional coal at notified prices and, in case of availability through higher capacity utilization, low cost power from NTPC and other Central Public Sector Undertakings (CPSUs). 

  • States not meeting operational milestones will be liable to forfeit their claim on IPDS and DDUGJY grants.

  • UDAY is optional for all States. However, States are encouraged to take the benefit at the earliest as benefits are dependent on the performance.


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