States take over Rs 2 lakh crore of DISCOMs debt via UDAY scheme

Key Highlights: 

• Participating States take over Rs 2.1 lakh crore of their DISCOMs
• States to issue Rs 37,000 crores bonds
• Net savings of approximately Rs 15,000 crore

Ministry of Power on Wednesday stated that Indian states took over Rs 2.09 lakh crore of DISCOM's debt through Ujwal DISCOM Assurance Yojana (UDAY) scheme. 

In a release, the ministry said, "Participating States of UDAY have taken over the targeted debt of Rs 2.09 lakh crores of their DISCOMs under borrowing exemption from the FRBM Act given in UDAY for the years 2015-16 and 2016-17."

With this, the process of states taking over the targeted debt and issuing them as State Development Loans (SDL) bonds has completed. 

Till March 2017, the participating states' DISCOMs have  achieved net savings of approximately Rs 15,000 crore.

Further, in the participating States, the Average Cost of Supply (ACS) - Average Revenue Realized (ARR) gaps have come down by almost 14 paise per Unit and the AT&C losses have reduced by almost 1% in FY 17.

Moreover, the participating states' DISCOMs have to issue bonds worth approximately Rs 37,000 crores, for which the ministry mentioned would be done in due course. 

UDAY scheme has been active since November 2015. Under this, state governments are required to take over 75% of short-term liabilities of their respective discoms (as in September-end 2015), 50% in the first year (FY16) and the balance in FY17. Discoms are expected to issue bonds for the remaining 25%of their debt.