The news on the Ujjwal Discom Assurance Yojana (UDAY) is a mixed bag. On the positive side, the financial metrics of state power distribution companies (discoms) improved in nine months of FY17, with their interest cost burden falling to 8.5%, as against 13% earlier. However, sustaining this performance would be a challenge in FY18 when UDAY’s incentives are no longer in place. The bottomline is that discoms have to improve on their operational parameters if the scheme’s benefits are to be sustained over the long term.
“Steps that culminate in the reduction of AT&C (Aggregate Technical & Commercial) losses, meeting the FY19 target of 15% losses, would be critical for the revival of discoms,” says Anujesh Dwivedi, director, Deloitte & Touche. Read More..