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UDAY (Ujwal DISCOM Assurance Yojana) Facts

Published on Saturday, September 29, 2018
Key Highlights of UDAY (Ujwal DISCOM Assurance Yojana)

  • Launch date: 05th November 2015 
  • Launch by: Prime Minister Shri Narendra Modi 

Aim:

  • Reforming the power sector. 

Objective of this Scheme:

  • For financial turnaround of Power Distribution Companies. 

Facts:

  • This scheme empowers DISCOMs with the opportunity to break even in the next 2-3 years through four initiatives. 
    • Improving operational efficiencies of DISCOMs. 
    • Reduction of cost of power. 
    • Reduction in interest cost of DISCOMs. 
    • Enforcing financial discipline on DISCOMs through alignment with State finances. 
  • Through some measures, reduction in cost of power would be achieved such as: 
    • Increased supply of cheaper domestic coal, 
    • Coal linkage rationalization, 
    • Liberal coal swaps from inefficient to efficient plants, 
    • Coal price rationalization based on GCV (Gross Calorific Value), 
    • Supply of washed and crushed coal, 
    • Faster completion of transmission lines. 
  • States will take over three-fourths of the debt of their respective discoms, Under the scheme. 
  • Remaining 25 per cent of the discom debt will be dealt by – 
    • Conversion into lower interest rate loans by the lending banks. 
    • Or be funded by money raised through discom bonds backed by State guarantee. 
  • Backing from the State will help bring down the interest rate for the discoms. 
  • For the bailout, in return, the discoms have been given target dates (2017 to 2019) by which they will have - 
    • To meet efficiency parameters such as reduction in power lost through transmission, theft and faulty metering, installing smart meters and implementing GIS (geographic information system) mapping of loss making areas. 
    • States will also have to ensure that power tariffs are revised regularly. 
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