Power Min: UDAY not a failure … new scheme will bring down losses

The Power Ministry has had discussions with the Finance Ministry, said Singh on the sidelines of the event, adding that he was “optimistic” that the new scheme would find a place in the Budget.

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The new scheme is expected to include elements of all of the earlier schemes. “So, now there will be only one scheme from the Ministry of Power and that scheme has a conditionality,” the minister said.

UDAY, the NDA government’s reform scheme to revive electricity distribution companies (discoms) in the country, has not failed, Power Minister RK Singh said on Monday. The next leg of reforms aimed at improving the financial health of discoms is likely to be announced in the upcoming budget, the minister added.

“We have solved the problem of access. We have also, over the years, improved the availability of power. Today, the average duration for which power is available is about 23-24 hours in most big cities, maybe 20-22 hours in the smaller cities and, in the villages, it would be about 18-20 hours,” said Singh, during the listing ceremony of the Power Finance Corporation’s $750-million international bond at the NSE.

“But this does not satisfy us. We have kept a target with the states that we will endeavour to give 24/7 supply, not only in the cities … but also in the villages,” he said, adding that the Power Ministry’s next target is to make discoms more viable.

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“In that also we have made progress, contrary to what people say. UDAY was not a failure,” said Singh, adding, “We’ve brought down the losses from 22 per cent to 18.79 per cent … and we’ll bring it down to below 15 per cent. That is our target for which we are coming out with a new scheme.”

The Power Ministry has had discussions with the Finance Ministry, said Singh on the sidelines of the event, adding that he was “optimistic” that the new scheme would find a place in the Budget. The new scheme is expected to include elements of all of the earlier schemes. “So, now there will be only one scheme from the Ministry of Power and that scheme has a conditionality,” the minister said.

He further said that discoms will be mandated to work out the trajectory for loss reduction. “The funds under the scheme will only be released if that trajectory is adhered to.”

“We are providing, in that scheme, for assistance for reduction of losses. Now, that assistance will be in terms of technology, in terms of modern equipment so as to help them to reduce the losses,” Singh added.

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Under UDAY, launched in 2015, state governments took over 75 per cent of the debt of discoms, issuing lower-interest bonds to service the rest of the debt, with the aim of reviving ailing state power distribution companies and making them operationally as well financially efficient.

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