Ujjwal Discom Assurance Yojana (UDAY) scheme

Why in news?

• Private sector power distribution companies (discoms) improved efficiency levels faster than state-owned counterparts under the Centre’s Ujjwal Discom Assurance Yojana (UDAY) scheme between FY16 and FY20, despite already being more efficient at the beginning of the period, according to government data.

About UDAY scheme:

• It was launched under Ministry of Power in 2015
• UDAY aims to improve the financial stability and operational performance of discoms, which have traditionally been the weak link in India’s power sector.

Salient Features of the Scheme

• States will take over 75% of the DISCOM debt as on 2015.
• States to issue non-SLR including SDL bonds, to take over debt and transfer the proceeds to DISCOMs in a mix of grant, loan, equity. Maturity period of bonds to be 10-15 years.
• Borrowing not to be included for calculating fiscal deficit of the State.
• Balance 25% of debt to remain with the DISCOMs in the following manner:
  • Issued as State-backed DISCOM bonds; or
  • Re-priced by Banks/FIs
• States to take over future losses of DISCOMs as per trajectory in a graded manner.

Benefits to Participating States:

• Reduction in Cost of power through Central Support
  • Increased supply of domestic coal
  • Allocation of coal linkages at notified prices
  • Coal price rationalization
  • Coal linkage rationalization & allowing coal swaps
  • Supply of washed & crushed coal
  • Additional coal at notified prices
  • Faster completion of Interstate Transmission lines
  • Power purchase through transparent competitive bidding
• Additional priority funding under DDUGJY, IPDS, etc.

Targeted Activities

• Reducing aggregate technical and commercial (AT&C) losses for discoms to 15 per cent by 2019
• Reducing the gap between average cost of power supply and average revenue realised (ACS-ARR gap) per unit (1 unit = 1 kilowatt hour) to zero by 2019
• Consumer indexing and GIS Mapping by 2018
• Smart meter for consumers by 2019
• Feeder Metering, DT Metering etc by 2017.

PRACTICE QUESTION:

Consider the following statements ‘Ujjwal Discom Assurance Yojana (UDAY) scheme’:

1. States participating in the scheme will get additional priority funding under Deen Dayal Upadhyaya Gram Jyoti Yojana

2. Under this scheme States will take over 75% of the DISCOM debt as on 2015.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer