UDAY energises Govt's bid to bring ailing discoms back to pink of financial health

Just 21 months after its approval, Uday — the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) Government's ambitious national revival plan for state power distribution companies (discoms) — is showing remarkable results. According to figures and other data provided during last week's review of Uday by Prime Minister Narendra Modi, there has been a marked improvement in the health of the country's discoms and the length of blackouts, which till very recently were a scourge in many parts of India, has declined sharply.

According to media reports, the states taking part in Uday have found relief for their debt pain by floating bonds worth Rs 2.32 lakh crore — approximately 87 per cent of the burden. When Uday was approved by the Government on November 5, 2015, the state discoms were reeling under an aggregate debt of Rs 3.95 lakh crore.

States that were ready to implement the policy measures being proposed under Uday accounted for around Rs 3.82 lakh crore (90 per cent) of this debt.

The Government's strategy was to regain operational strength by reducing aggregate transmission and commercial (AT&C) losses by introducing metering on a large scale and improving revenue through a strong billing and collection process.

And the data show that the programme has been a bumper success, with 12 states achieving a drop in AT&C losses and 15 others shrinking the gap between their aggregate cost of supply (ACS) and aggregate rate of realisation. Nationally the ACS-ARR gap has declined from 59 paisa per unit in fiscal 2016-2017 to about 45 paisa per unit at present.

And in the current fiscal (2017-18), the average AT&C loss for all states that have signed up for UDAY has fallen to 20 per cent.

The discoms' average annual losses have dropped from Rs 51,340 crore in financial year 2015-2016 to Rs 40,295 crore in 2016-2017.

In a pleasant surprise, the Government has found that the average duration of power cuts fell by 61 per cent to 7.45 hours a month in May this year from 19.38 hours in the corresponding period a year ago.