Topic: UDAY-Ujwal DISCOM Assurance Yojana Topic: Economy - Infrastructure-Electricity
Ujwal DISCOM Assurance Yojana (UDAY)
- Ujwal DISCOM Assurance Yojana or its acronym UDAY is a financial package for the turnaround and revival of electricity distribution companies of India (DISCOMs) initiated by the Indian Government with an aim to find a lasting solution to the financial disorder that the power distribution is presently in.
- Under this scheme, the state governments (which are the owners of the discoms) will take over 75% of the debt of the discoms as on 30th September 2015, with a plan to repay creditors by selling bonds. The discoms will then issue bonds for the remainder of their debt (i.e., the remaining 25%).
- Ministry of Power, GoI launched Ujwal DISCOM Assurance Yojana (UDAY) which was approved by Union Cabinet on 5th November, 2015.
The scheme envisages
- Financial Turnaround
- Operational improvement
- Reduction of cost of generation of power
- Development of Renewable Energy
- Energy efficiency & conservation
Salient Features of the Scheme
- States will take over 75% of the DISCOM debt as on Sept 30, 2015 with 50% being taken over in financial year 2015-16 and the rest 25% in 2016-17.
- States will issue non-SLR including SDL bonds to take over debt and transfer the proceeds to DISCOMs in a mix of loan, grant and equity.
- Borrowing will not be counted for calculating fiscal deficit of the State.
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.
Impact of the Scheme
- Financially & Operationally sound DISCOMs
- Increased demand for power
- Improvement in PLF(Plant Load Factor) of generating plants
- Reduction in stressed assets
- Availability of cheaper funds
- Increased capital investment
- Development of Renewable Energy sector
Ultimately, availability of 24*7 Power For All at affordable price.