Thanks To UDAY Effort, Power Discoms Cut Losses By 21.5 Per Cent In 2016-17

Power discoms in 26 states and the union territory of Puducherry have cut losses by 21.5 per cent, thanks to the government’s Ujwal Discom Assurance Yojana (UDAY) that is aimed at mending operational and bill collection efficiency of state-run power utilities. Combined losses of state-run utilities in 2016-17 fell 21.5 per cent from a year ago to Rs 40,295 crore.

Reduction in losses has been attributed to increased bill payment compliance by consumers and reduction in power theft and stringent monitoring of the utilities’ operations by state governments which took over three-fourths of their accumulated debt under UDAY scheme, approved by the cabinet in 2015.

A central government official said some states have been successful in cutting their losses significantly, like for instance, the utilities in Rajasthan, which reduced losses by 54 per cent in 2016-17 to Rs 5,208 crore from a year ago. Those in Tamil Nadu lowered losses by 35 per cent to Rs 3,783 crore in the same period, while those in Uttar Pradesh cut losses by 14 per cent to Rs 6,619 crore.

The UDAY scheme allowed state governments to take over half the outstanding debt of utilities in 2015-16 and another 25 per cent in 2016-17. The remaining was to be refinanced by the distribution companies through state-guaranteed bonds, which would help them reduce interest cost.

Also Read: For UDAY To Work, States Must Fulfill Their Part Of The Deal