UDAY to reduce power losses in distribution sector: Minister

The Ujwal DISCOM Assurance Yojana (UDAY) was launched by the Government of India on 20-11-2015 for operational and financial turnaround of State owned Power Distribution Companies (DISCOMs). The Scheme aims to reduce the interest burden, reduce the cost of power, reduce power losses in Distribution sector, and improve operational efficiency of DISCOMs. This was stated by Piyush Goyal, Minister of State (IC) for Power, Coal & New and Renewable Energy in a written reply to a question in the Lok Sabha. The Minister further stated that so far, 17 States have given their ‘in-principle’ approval to join the Scheme UDAY. Out of these, the States of Chhattisgarh, Bihar, Jharkhand, Gujarat, Rajasthan and Uttar Pradesh have already signed MoUs under UDAY. The Scheme incentivizes the States by exempting State takeover of DISCOM debts from Fiscal Responsibility and Budget Management (FRBM) limits for two years; increased supply of domestic coal; coal linkage rationalization; liberally allowing coal swaps, allocation of coal linkages to States at notified prices and additional/priority funding in Schemes of Ministry of Power and Ministry of New & Renewable Energy, if they meet the operational milestones in the Scheme. The Minister further stated that participating States along with the DISCOMs have to enter into MoU with Government of India and take over 50% of outstanding debt as on 30-09-2015 by 31st March, 2016, the Minister added.