Saubhagya Scheme Target To Miss Deadline Of December 2018
Union government recently announced its achievement of 100% electrification of all villages before schedule. However, states, especially those in the non-special category, are saddled with a bigger worry to electrify all households by December 2018 as mandated in the Centre’s Saubhagya scheme.
The country still has 31.2 million unelectrified households. Of this, the special category states (SCS) have 3.3 million households to cover while the non-special category states will have to electrify the rest. The funding requirement for SCS households is pegged at Rs 45 billion. Such states would be granted 90% of the funding requirement, so they will find it easier to achieve the electrification targets.
In contrast, the non-SCS states need funds of the order of Rs 150-180 billion over the next seven months to electrify the balance households. A report by CARE Ratings points out that state discoms (distribution companies) with high outstanding UDAY (Ujwal Discom Assurance Yojana) bonds and poor operational efficiency would find it difficult to quickly create infrastructure and ramp up transmission network for ensuring last mile connectivity.
Between them, Uttar Pradesh, Bihar, Odisha and Jharkhand have almost 22 million unelectrified households and would find it tough to achieve Saubhagya scheme targets by December 2018. Uttar Pradesh alone has 13.25 million unelectrified households, 42.4% of the country’s total. The state is also amongst the top three power consuming states. Uttar Pradesh is followed by Bihar with 3.2 million unelectrified houses. Odisha, Jharkhand, Rajasthan, Assam and Madhya Pradesh have over one million unelectrified households each.
Discoms in UP and Bihar continue to lag on operational parameters, the report by CARE Ratings says. Both Bihar and Uttar Pradesh have steep AT&C (aggregate technical & commercial) losses at 36.8% and 31% respectively. A high AT&C loss is a pointer to a discom’s lower collection efficiency and lesser revenues which leads to mounting losses and affects the company’s fundraising capacity.
UP and Rajasthan account for 52.4% of the UDAY bonds issued, at Rs 1.21 trillion out of the total UDAY bonds issued worth Rs 2.33 trillion. Telangana, Madhya Pradesh and Odisha also have sizeable amounts of outstanding UDAY bonds. The bonds were issued to cut interest cost on the discoms while they improved their operational efficiency. For discoms with mounting losses, arranging Rs 150-180 billion is an immediate challenge unless state governments or financing agencies like Rural Electrification Corporation (REC provide for the same.
Since the introduction of the Saubhagya scheme in September 2017, 5.4 million households have been electrified. With barely 200 days left to achieve the target for electrification of balance households, almost 150,000 households need to be electrified each day.
The Union government has allocated Rs 215.50 billion for electrification scheme. Out of the total outlay, Rs 27.5 billion is set aside for the Saubhagya scheme and the residual funds for implementing Deen Dayal Upadhyay Gram Jyoti Yojana.
Source Link- https://thewire.in/