Modi’s UDAY scheme hasn’t helped Indian power firms, instead it’s wrecking state finances


Modi’s UDAY scheme hasn’t helped Indian power firms, instead it’s wrecking state finances

An ambitious scheme of the Narendra Modi government, launched in 2015 to help embattled Indian power distribution companies, now weighs heavy on the finances of various states.

The total debt burden of India’s states is expected to touch Rs52.58 lakh crore ($740 billion) by the end of financial year 2020, an 11.5% increase from the previous year. “The outstanding debt of states has increased to 25% (pdf) of their combined GDP over the last five years,” according to a recent Reserve Bank of India (RBI) report.

The single-biggest burden on state finances are their indebted power distribution companies, or discoms, according to the central bank.

Analysts who Quartz spoke to agree. “Under (prime minister Modi’s) UDAY scheme, states took on the liabilities of discoms in return for a commitment to a charter Read more

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