Narendra Modi government’s ambitious discoms’ rescue scheme, UDAY, recently witnessed a huge success with both Haryana power distribution companies posting profits after a gap of 15 years. However, the story is slightly different in Uttar Pradesh as the state discom, Uttar Pradesh Power Corporation Ltd, is grappling with dues. The cash-strapped discom is dealing with power theft, outstanding bills and defaults from government’s own departments.
“Though we have been able to bring the cash gap under control, we are nowhere near our target,” a senior official of UPPCL told the Financial Express. “UPPCL’s cash gap is increasing mainly due to government departments not making regular bill payments,” the official added. Several government departments together owe UPPCL Rs 10,400 crore.
Launched in 2015, the Ujwal DISCOM Assurance Yojana (UDAY) is a financial rescue scheme that absorbs discoms’ debt against targets to improve their efficiencies.
An analysis by India Ratings said that the real success of UDAY lies in how quickly discoms of larger states such as Uttar Pradesh, Maharashtra, Tamil Nadu, among others turn around and make their finances self-sustainable. Read More