Reforms short-circuited

The UDAY scheme does not address basic issues in power distribution

Reforms short-circuited

A recent BusinessLineanalysis (April 21) points out how the financial condition of power distribution companies has only worsened after the launch of the Ujjwal Discom Assurance Yojana (UDAY). Their dues to power generators, at over 41,000 crore, have been rising after the launch of UDAY in 2015.

The aims of UDAY — reduction in aggregate technical and commercial losses, reduction of the gap between costs and revenue and tariff revisions — have not been met. A complex tangle of factors is responsible for the power sector being persistently in the red. A key factor is the problem of unaccounted power.

The fact that all connections are not metered (and this is true even of urban pockets) means that discom estimates of consumption cannot be taken at face value. Read More

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