All about U.D.A.Y (Ujwal
DISCOM Assurance Yojana)
Ujwal DISCOM Assurance Yojana (UDAY) provides for the financial turnaround and
revival of Power Distribution companies (DISCOMs), and importantly also ensures a
sustainable permanent solution to the problem. UDAY is a path breaking reform for
realizing the Hon’ble Prime Minister’s vision of affordable and accessible 24x7 Power
It is another decisive step furthering the landmark strides made in the Power sector
over the past one and a half years, with the sector witnessing a series of historic
improvements across the entire value chain, from fuel supply (highest coal production
growth in over 2 decades), to generation (highest ever capacity addition), transmission
(highest ever increase in transmission lines) and consumption (over 2.3 crore LED bulbs
States shall take over 75% of DISCOM debt as on 30 September 2015 over two
years - 50% of DISCOM debt shall be taken over in 2015-16 and 25% in
Government of India will not include the debt taken over by the States as
per the above scheme in the calculation of fiscal deficit of respective States in
the financial years 2015-16 and 2016-17.
States will issue non-SLR including SDL bonds in the market or directly to the
respective banks / Financial Institutions (FIs) holding the DISCOM debt to the
DISCOM debt not taken over by the State shall be converted by the Banks / FIs
into loans or bonds with interest rate not more than the bank’s base rate plus
0.1%. Alternately, this debt may be fully or partly issued by the DISCOM as
State guaranteed DISCOM bonds at the prevailing market rates which shall be
equal to or less than bank base rate plus 0.1%
States shall take over the future losses of DISCOMs in a graded manner and
shall fund them as follows:
State DISCOMs will comply with the Renewable Purchase Obligation (RPO)
outstanding since 1st April, 2012, within a period to be decided in consultation
with Ministry of Power.
States accepting UDAY and performing as per operational milestones will be
given additional / priority funding through Deendayal Upadhyaya Gram Jyoti
Yojana (DDUGJY),Integrated Power Development Scheme (IPDS), Power
Sector Development Fund (PSDF) or other such schemes of Ministry of
Power and Ministry of New and Renewable Energy.
Such States shall also be supported with additional coal at notified prices
and, in case of availability through higher capacity utilization, low cost power
from NTPC and other Central Public Sector Undertakings (CPSUs).
States not meeting operational milestones will be liable to forfeit their claim on
IPDS and DDUGJY grants.
U.D.A.Y is optional for all States. However, States are encouraged to take the
benefit at the earliest as benefits are dependent on the performance.
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