Two years of journey and UDAY encourages power supply

Ujwal Discom Assurance Yojna (UDAY) has helped Power Distribution Companies (DISCOMs) to put them back in shape and reducing the duration of blackouts in the nearly two years since the treatment began.

UDAY was approved on November 5, 2015, when all state DISCOMs had a collective debt of Rs 3.95 lakh crore. Out of that 90% of this debt, or Rs 3.82 lakh crore, belonged to states that were ready to consume the pills being proposed in UDAY.

Almost two years down the line, the participating states now have found relief for their debt pain by floating bonds worth Rs 2.32 lakh crore, or nearly 87% of the burden.

Out of total 27 states under UDAY scheme, 12 states reporting a reduction in AT&C losses and 15 states shrinking the gap between their aggregate cost of supply (ACS) and aggregate rate of realisation (ARR).

The difference between the cost of power supply and revenue has come down from 59 paise in fiscal year 2016 to 45 paise in 2017, due to the reduced interest outgo, tariff rationalisation and improved billing. Besides, the AT&C loss of UDAY states has reduced to 20% in this fiscal, from 24 per cent in FY’16. The average annual loss of DISCOMs have come down from Rs 51,340 crore in fiscal 2016 to Rs 40,295 crore in 2017. A recent government statement said the average duration of power cuts declined 61% to 7.45 hours a month in May this year from 19.38 hours in the year-ago period.