Power and renewable energy minister RK Singh on Monday said the Ujwal Discom Assurance Yojna ( UDAY) was not a failure, as it reduced average commercial losses of distribution companies. He also said a successive scheme for revival of the utilities may be announced in the Union Budget later this week.
“We have discussed the new (UDAY) scheme with finance ministry. We expect it to find a place in the Budget,” said Singh on the sidelines of the listing ceremony of the $750-million international bond of Power Finance Corporation (PFC) on the NSE.
The power minister said all the Central schemes run by his ministry will be clubbed into one scheme, under which distribution companies will have to agree to trajectories to reduce losses to get financial assistance. “UDAY was not a failure. It reduced average commercial losses to 18.79% in financial year 2019 against 22% a year ago,” he said, adding that the government is targeting to reduce commercial losses to 15% with the new scheme.
Singh said financing from Power Finance Corp and REC Ltd will also be revised to give loans to only those discoms that meet the set targets.
ET had on January 17 reported that the government plans a grant of over Rs 1.1 lakh crore to state power distribution companies under a new bailout scheme that will mandate discoms with high losses to either privatise operations or appoint distribution franchisees and invest in infrastructure upgradation.
The government expects to spur about Rs 3 lakh crore of investments in the distribution sector through the latest discom restructuring scheme that it claims is different from the three previous initiatives.