Maharashtra government to re-join UDAY for financial benefits, to save Rs 1500 cr every year

Maharashtra government to re-join UDAY for financial benefits, to save Rs 1500 cr every year

The Maharashtra government that had so far agreed to join the power distribution companies (Discoms) revival scheme — UDAY only for operational benefits, is now likely to go back to the Cabinet for getting financial benefits being offered under the scheme

Union minister, Piyush Goyal said the state has now shown interest in the financial benefits of the UDAY scheme and could soon pass another Cabinet decision to re-join the Discom revival scheme to include financial parameters along with existing operational benefits.

Even though Maharashtra did not have any major financial losses, the financial efficiencies under UDAY could benefit the state to the tune of Rs 1500 crore every year, the minister said.

Launched in November 2015, UDAY provides the ailing Discoms with a clear roadmap and opportunity to become profitable in the next 3 years.

The UDAY scheme envisages the respective states of loss making dicoms taking over 75% cent of the Discoms debt into their books — taking over 50% of the short-term liabilities of their respective discoms in FY16 and remaining 25% in FY17. UDAY has been designed through extensive stakeholder consultations and has been a game changer for States.

Under UDAY, every DISCOM is expected to eliminate losses by 2019-20 , with potential savings of over Rs. 180,000 crore every year, starting 2019.

And so despite the scheme being an optional one, as many as 20 States and Union Territories have given their consent to join of which, 13 States, viz, Rajasthan, Uttar Pradesh, Chhattisgarh, Jharkhand, Punjab, Bihar, Haryana, Gujarat, Uttarakhand, Karnataka, Goa, Jammu & Kashmir and Andhra Pradesh have already signed MOUs with the Central Government.

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UDAY bonds worth about Rs. 1 lakh crore were issued within three weeks.

In 2015-16, Bonds worth Rs 99,541 crore were floated by the participating States to clear 50% of the outstanding debt of States and outstanding CPSU dues in Jharkhand and Jammu & Kashmir.

Further, DISCOM Bonds worth Rs 11,524 crore were floated. In the year 2016-17, Bonds worth Rs. 48,391 crore have been floated by Rajasthan, Uttar Pradesh and Punjab.

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