UDAY Scheme Fails In UP, Provided Electricity To Only 12% Households
Uttar Pradesh discoms have failed to benefit from the Ujwal DISCOM Assurance Yojana (UDAY Scheme), launched by the central government in 2015 to bring discoms out of debt, the GSI study said.
Since joining the scheme in March 2017, the UP government and the state’s DISCOMs (electricity distribution companies) have saved Rs 3,323 crore–just 15.46% of their total losses and have managed to provide electricity to only 12% of about 18 million unconnected households that were targeted.
As of March 2017, 31.83% of the total 28.9 million rural households in UP had access to electricity. The number of electrified households in urban areas was higher, with 7.8 million or 84% of the 9.3 million households having access to electricity, the GSI report said.
The remaining 21 million or 55% of households (both urban and rural) are targeted to be connected to the grid before 2022 under the ‘24×7 Power for All’ scheme, which aims to provide all households with 18-20 hours of electricity every day. As mentioned earlier, UP would have to electrify 350,000 households per month to meet this target.
This would only be possible by strengthening discoms, which face many challenges: primarily, substantial losses due to revenue shortfalls, which are blamed on transmission losses, power theft and lack of bill collection, the study said.
UDAY, a form of financial assistance launched by the central government in 2015 to bail out debt-ridden discoms, has also failed to help in UP.
UDAY scheme absorbs discoms’ debt provided discoms improve operational efficiencies, reduce power and interest costs, enforce financial discipline through monitoring of average technical & commercial (AT&C) losses–which include transmission losses, power theft and metering deficiency–and tariff revisions. The debt is financed via bonds with a maturity period of 10-15 years, and discoms are given targets to meet.
Since joining the scheme in March 2017, the UP government and the state’s discoms have issued bonds worth Rs 49,847 crore. Reportedly, this has saved the state Rs 3,323 crore just 15.46% of their total losses–through lowered interest costs, the study said.
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