CENTRAL GOVERNMENT SCHEMES
UJWAL Discom Assurance Yojana (UDAY)-2015
Launched: 20 November 2015
Main Objective: To obtain operational and financial turnaround of State owned Power Distribution Companies (DISCOMs).
The Scheme aims to reduce the interest burden, reduce the cost of power, reduce power losses in Distribution sector, and improve operational efficiency of DISCOMs.
ABOUT COMPLETE SCHEME
Ministry of Power, GoI launched Ujwal DISCOM Assurance Yojana (UDAY) which was approved by Union Cabinet on 5th November, 2015.
The scheme envisages:
1. Financial Turnaround
2. Operational improvement
3. Reduction of cost of generation of power
4. Development of Renewable Energy
5. Energy efficiency & conservation
Salient Features of the Scheme
For Financial Turnaround
1. States will take over 75% of the DISCOM debt as on Sept 30, 2015 - 50% in FY 2015-16 and 25% in FY 2016-17.
2. States to issue non-SLR including SDL bonds, to take over debt and transfer the proceeds to DISCOMs in a mix of grant, loan, equity.
3. Maturity period of bonds - 10-15 years.
4. Moratorium period – up to 5 years.
5. Rate - G-sec plus 0.5% spread plus 0.25% spread for non-SLR.
6. Borrowing not to be included for calculating fiscal deficit of the State.
Achieving Financial Turnaround
1. Balance 25% of debt to remain with the DISCOMs in the following manner:
*Issued as State-backed DISCOM bonds; or
*Re-priced by Banks/FIs at interest rate not more than bank base rate + 0.10%
2. States to take over future losses of DISCOMs as per trajectory in a graded manner.
[0% of loss of 14-15 & 15-16; 5% of 16-17; 10% of 17-18; 25% of 18-19 & 50% of 2019-20]
3. Balance losses to be financed through State bonds or DISCOM bonds backed by State Govt guarantee, to the extent of loss trajectory finalised with MoP.
4. Jharkhand and J&K given special dispensation for take over of outstanding CPSU dues