The data about UDAY scheme is positive but has some shortcomings.
Ujwal DISCOM Assurance Yojana (UDAY) is the financial turnaround and revival package for electricity distribution companies of India (DISCOMs) initiated by the Government of India with the intent to find a permanent solution to the financial mess that the power distribution is in
What are problems the scheme?
There is no data for 11 of the 27 states and Union Territories that have opted for Uday.
The figure of Rs.268,778.21 crore covers only 75 per cent of the debt of the discoms in the remaining 16 states and Union Territories.
Discoms not buying as much power as they should, not because they don’t have demand for the power they can supply, but because their weak finances.
Power from the grid is not available, at a price which is substantially higher than the grid power price.
What is the stand of the government?
The government is hoping that with reduction of AT&C losses to 15 per cent in 2018-19.
The discoms will start buying as much power as they should and stop load shedding, with the consumers meeting all of their power requirements from the grid.
Transmission losses will be reduced through a comprehensive IEC campaign to address the chronic problem of widespread.
According to the data on the Uday website, AT&C losses averaged 23.98 per cent for 16 states as on September 30, 2016.
But these losses averaged 19.95 per cent for 22 states as on December 31, 2016.
There was a reduction of as much as 4.03 percentage points in these losses in just three months.
This suggests that the government may have already achieved its 2018-19 target of reducing AT&C losses to 15 per cent.
What is the way forward?
There are certainly some positive signs, but one cannot, because of lack of corroborative evidence, definitely say that Uday has made a positive difference.
Though there are positive attributes, there are unanswered questions about the actions taken by the government to empower discoms.
Uday has helped discoms and improved payments, but the biggest challenge for the sector continues to be the offtake of power.
Discoms are still reluctant to buy power.
If Uday succeed in delivering the intended outcome of making India’s discoms financially viable, so that they are no longer a burden on the country’s public finances.
One will have to wait for some time before one can say something definite about Uday’s impact.
