Lok Sabha Question No. 3890 (UNSTARRED), answered on 2016-12-08
Subject: UDAY
Ministry: POWER
Asked by: DARSHANA VIKRAM JARDOSH, CH. MALLA REDDY, CHINTAMANI MALVIYA

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.3890 TO BE ANSWERED ON 08.12.2016

## UDAY

†3890.  SHRIMATI DARSHANA VIKRAM JARDOSH: SHRI CH. MALLA REDDY: PROF. CHINTAMANI MALVIYA:

Will the Minister of POWER be pleased to state:

- (a) whether  the  Government  has  fixed  a  target  to  ensure  loss  free operation of each power distribution company by the year- 2019;
- (b) if so, the details thereof along with the steps being taken/likely to be taken to bail out the loss making power distribution companies;
- (c) whether  a  few  States  have  gone  through  the  Ujwal  DISCOM Assurance Yojana (UDAY) process and if  so,  the  names  of  those  States and the results achieved by them;
- (d) the steps being taken to reign in other States under the UDAY; and
- (e) the percentage of debt financing by State DISCOMS and its impact on the power sector?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, COAL, NEW & RENEWABLE ENERGY AND MINES

( SHRI  PIYUSH GOYAL )

(a)  : The Government of India has launched Ujwal DISCOM Assurance Yojana (UDAY) on 20-11-2015 for the financial and operational turnaround  of  state-owned  Power  Distribution  Companies  (DISCOMs). Participating  States/UTs,  have  signed  a  Memorandum  of  Understanding (MoU)  under  UDAY,  to  reduce  the  gap  between  Average  Cost  of  Supply (ACS) and Average Revenue Realized (ARR) to zero latest by 2019-20.

..........2.

(b) : The  scheme  aims  to  reduce  the  interest  costs,  reduce  the cost of power and improve operational efficiency of DISCOMs  by measures,  which  include  States  taking  over  75%  of  DISCOMs  debts  as existed  on  30.09.2015;  efficiency  measures  such  as  coal  swaps,  coal linkage  rationalization,  supply  of  washed  coal,  etc.  for  Thermal  power plants; Demand  side management, feeder metering, segregation & improvement etc.

(c) & (d) : So far, Sixteen States (Andhra Pradesh,  Bihar, Chhattisgarh, Goa,  Gujarat,  Haryana,  J&K,  Jharkhand,  Karnataka,  Madhya  Pradesh, Maharashtra, Manipur,  Punjab, Rajasthan, Uttar Pradesh, Uttarakhand and the Union Territory (Puducherry) have signed the  Memorandum  of Understanding  (MoU)  with  the  Government  of  India  under  UDAY.  The participating  States  have  issued  Bonds  worth  1,82,204.29  crores  under UDAY  and  thus  reduction  in  interest  cost  has  already  started.    Cost  of Power Generation is also on downward trend.

UDAY  is  an  optional  scheme  for  the  States  to  join for achieving  financial  and  operational  turnaround  of  their  DISCOMs.  The Government  of  India  has  already  explained  the  details  to  the  States intending to participate under the scheme and also extended the timeline upto 31-03-2017 to facilitate their participation.

(e)  : The scheme envisages that participating States take over 75% of DISCOM debt as on 30th September, 2015 over the periods 2015-16 and 2016-17.  The  DISCOMs  would  convert  25%  of  their  balance  debt  into repriced  loans/Bonds  below  a  predecided  maximum  interest  rate.    This will result in significant reduction of the interest burden and cut down on losses of DISCOMS, which in turn, will have a positive impact on the entire Power Sector value chain.

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